Lee Iacocca's retirement, executives sharply reduced their sales in October.

The slowdown in insider selling preceded by only a few weeks Kirk Kerkorian's November 4 disclosure to the Securities and Exchange Commission that he was exploring the possibility of an "extraordinary corporate transaction'' that included the possibility of a merger.

The filing said he had held discussions with management about the company and anticipated that discussions would continue. At the time of his disclosure, Mr. Kerkorian owned 32 million shares of Chrysler stock.

Last week Mr. Kerkorian's Tracinda Corp. and Mr. Iacocca offered to buy the remaining 90 percent of Chrysler for $55 a share, or about $20 billion.

A Chrysler spokesman says the noticeable reduction in insider sales in October "had no relationship whatsoever'' with Mr. Kerkorian. "We are not going to comment on the filing.'' None of the insider-trading data reflect transactions by Mr. Iacocca.

During the last years of Mr. Iacocca's reign at Chrysler, insider purchases and sales were about equal, a situation that analysts who follow insider trading say was mildly bullish for the nation's No. 3 auto maker.

But when Mr. Iacocca finally retired from Chrysler's chairmanship in 1992, the number of sales began to rise along with its stock price. That year Chrysler insiders dumped 827,000 shares while buying just 82,000, a 10-to-one ratio, as the stock price surged to nearly 34 from around $11.50. And 1993 brought a further acceleration of sales that reached a pace of 20 times purchases, again as the stock price climbed to more than $58 toward the end of the year.

"The change in investment patterns was significant,'' says Dave Coleman, an analyst with Vicker Stock Research, a firm in Washington, D.C. that monitors insider activity.

"From '92 to '93, insiders opened the floodgates and started selling aggressively. It just appeared that management did not believe the company would do well without Iacocca.'' Insiders stepped on the brakes last year, sharply reducing their sales levels.

For 1994, insiders sold just 300,000 shares and the vast majority of those were dumped in the first seven or eight months of the year. While Chrysler imposes no formal restrictions on insider trading, it does encourage its executives to buy or sell shares during certain "windows'' following release of quarterly earnings.

"At Chrysler we suggest to our officers that the best time to transact is during the window period,'' says Tom Gunton, senior staff counsel for Chrysler. "The window period opens three days after earnings are released and continues for 12 working days after that. We suggest to our officers that's the safest time to trade.'' Bob Gabele, president of CDA-Investnet, a Fort Lauderdale, Florida, firm that also tracks insider activity, says it is noteworthy that the October window showed the smallest amount of insider selling of any such period in 1994.

"The July window was the heaviest with around 153,000 insider shares sold,'' he says. "Then in October, 21,000 insider shares are sold. That certainly is interesting. It does seem that in October the insiders were in a mood to hang on to their shares.'' James Solloway, director of research at Argus Research, says nothing changed in the fundamental outlook for Chrysler late last year that would explain the sudden slowing of insider sales. "Nothing with regards to business conditions improved,'' he says. "If anything, there has actually been some deterioration, some decline in the number of cars sold.'' Mr. Gunton, the Chrysler lawyer, says he has "no idea'' why insider sales decreased two weeks before Tracinda's SEC filing.

In the schedule 13D document filed with the SEC, Mr. Kerkorian states that he and Tracinda "are currently exploring and may explore from time to time in the future a variety of alternatives.'' These, the document went on, included "an extraordinary corporate transaction, such as a merger, reorganization or liquidation, including the company or any of its subsidiaries,'' and "a change in the present board of directors or management of the company.'' Since the filing, insider sales have resumed the pace of early 1994. In the latest window, which closed Feb. 8, Chrysler insiders sold 134,000 shares.

There were no purchases.

Chrysler's stock now trades at around $46.75 a share on the New York Stock Exchange, slightly higher than the $44.875 at which it closed on February 8, the last day of the latest window.