Nancy Pelosi, the current Speaker of the US House of Representatives, is often touted for her stellar stock-picking skill, which ranks among the best when compared with her other House peers.
The snippet above, sourced from Unusual Whales, summarizes Nancy Pelosi’s current positions in the market. As is evident, the House Speaker is heavily invested in the US tech sector.
Bear in mind that a law passed back in 2012 mandates US lawmakers to declare equity market transactions, performed either by themselves or their close family members, within 45 days by filing a Periodic Transaction Report. Moreover, these lawmakers are also prohibited from leveraging any non-public information that they might be privy to in order to gain any financial advantages. Nonetheless, given the relatively robust stock-picking record of most US lawmakers, some investors on Reddit and other social media platforms have been calling for a complete ban on stock trading by these individuals, a recommendation that Pelosi supported back in early 2022.
Amazon $AMZN today has a 20:1 stock split.
Nancy Pelosi and husband bought 20 $AMZN calls with a strike of $3000 expiring 6/17/22 on May 21, 2021.
These positions were bought for $520 per contract. They are currently worth $4.24.
— unusual_whales (@unusual_whales) June 6, 2022
This brings us to the crux of the matter. Nancy Pelosi has lost a sizable sum on her Amazon bet placed on the 21st of May 2021 by buying 20 call options with a strike price of $3,000 and expiring on the 17th of June 2022. To wit, these calls were trading at around the $520 level back in May 2021. Currently, however, these calls are worth just over $4, entailing a massive loss of over 99 percent, assuming that this trade was not hedged. Of course, a huge factor behind this loss is the drubbing that Amazon shares have received in recent weeks amid the waning strength of the US retail sector. Nonetheless, Amazon implemented a 20-for-1 stock split on Monday, allowing the stock to outperform the broader market during the day. The chart below summarizes the performance of AMZN Jun 2022 3000.000 call options:
Readers should note that losses of such magnitude are quite rare for Nancy Pelosi, who is usually found on the winning side of her trades. As an illustration, the House Speaker recently bought call options on Apple and Microsoft in May 2022.
Nancy Pelosi’s trading is just uncanny. She literally nailed the exact NASDAQ bottom on May 24th buying those $AAPL and $MSFT calls. I mean… She’s 82yo, yet trades options better than a Citadel algo running on a dedicated $300m mainframe computer.
Bingo or Bridge, this is not. pic.twitter.com/CP9WdutUbb
— Wasteland Capital (@ecommerceshares) June 6, 2022
As expected, Nancy Pelosi is up on both of these trades. To wit, the House Speaker recently purchased 100 call options on Apple with a strike price of $80 and expiring on the 16th of June 2023. This trade was disclosed on the 13th of May. In addition, on the 24th of May, Pelosi disclosed the purchase of another 50 call options on Apple, again with a strike price of $80 and expiring on the 16th of June 2023. Moreover, on the 24th of May, the House Speaker also disclosed 10 call options on Microsoft bearing a strike price of $180 and expiring on the 16th of June 2023. The charts below summarize the performance of the AAPL Jun 2023 80.000 call option as well as the MSFT Jun 2023 180.000 call option:
With the broader market expected to bottom in Q2 or early Q3 2022, as per the latest research note from Morgan Stanley's Michael Wilson, Nancy Pelosi stands to gain quite a lot by buying Apple and Microsoft shares at the current price level. Do you think US lawmakers should be completely banned from trading stocks? Let us know your thoughts in the comments section below.
The post Nancy Pelosi Loses Big on Her Amazon Bet but Stands to Gain Quite a Lot on Microsoft and Apple Trades by Rohail Saleem appeared first on Wccftech.