Key points
- Pelosi (or perhaps her husband Paul Pelosi of venture firm Financial Leasing Services) made two February trades of PANW call options.
- The first trade occurred on February 12 and involved the purchase of 50 PANW call options.
- Pelosi’s track record with large-cap technology stocks is strong, particularly Nvidia Corp. (NASDAQ: NVDA).
- 5 stocks we like most about Invesco QQQ
Despite some ethical concerns, members of the U.S. Senate and House of Representatives frequently buy and sell shares of publicly traded companies, often at fantastic returns.
Elected officials’ trading habits are also public data in their mandatory financial disclosures, so MarketBeat’s Congressional trade tracker lets investors keep tabs on who’s trading what in Washington. And few officials command more attention than former House Speaker Nancy Pelosi, who recently revealed a senior position at the cybersecurity giant Palo Alto Networks NASDAQ: PANW.
According to a recent U.S. House of Representatives Official Transaction Report, Pelosi (or possibly her husband Paul Pelosi of venture capital firm Financial Leasing Services) made two February trades of PANW call options.
The first trade occurred on February 12 and involved the purchase of 50 PANW call options with a strike price of $200 and an expiration of January 17, 2025. The reported cost of this trade was between $500,000 and $1 million ( officials only need to report a specific range of the position value, not the exact figure.)
Unfortunately for Pelosi, Palo Alto shares plummeted after she lowered guidance during the Feb. 20 earnings conference call.
Despite the poor forecast for 2024, the Pelosis were not discouraged. In the same periodic trade report, they purchased a second set of call options: this time 20 calls with the same $200 strike expiring in January 2025 worth between $100,000 and $125,000.
PANW shares rebounded strongly following earnings as financial and social media widely reported Pelosi’s move. While this particular trade may not yet be on the green side of the PnL chart, the January 2025 expiration provides ample time for the position to recover its value, and Pelosi’s track record with large-cap tech stocks is strong, especially Nvidia Corp. NASDAQ:NVDA.
NVDA and Pelosi have been linked since a disclosure revealed a purchase of NVDA call options on November 22, 2023. According to the report, Pelosi purchased 50 NVDA calls with a strike price of $120 and an expiration date of December 20 2024. The total value was between $1 million and $5 million at the trade’s opening (estimated around $1.5 million based on option pricing data). As you’ll see in the chart below, this position was a big winner for Pelosi’s portfolio.
NVDA stock hovered between $450 and $500 per share in November 2023, when Pelosi opened her 50-call option position. The stock had already rebounded significantly from 2022 lows around $100, but market indices were still significantly below all-time highs and sentiment was mixed at best. The stock has nearly doubled in just three months since he opened the position. As of this writing, 50 call options at a strike price of $120 and expiring on December 20 would be worth over $3.3 million.
Pelosi scored a huge win with her NVDA trade, but her initial purchase of PANW call options preceded a massive drop in earnings. ETFs have tried to track the trading habits of representatives and senators with mixed results. Here’s a chart comparing Unusual Whales’ Democratic and Republican trading ETFs with I invest QQQ NASDAQ: QQQthe NASDAQ 100 Technology ETF.
The Democratic ETF has a significant concentration of large-cap technology stocks, while the Republican ETF features more oil, gas, and consumer staples stocks. But regardless of the difference in holdings, both Congressional trading-themed ETFs have failed to match QQQ’s returns over the past 12 months.
Learn more on MarketBeat’s Compare Stocks page.
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