Nancy Pelosi has about 3 months left in Congress.
She announced last November that she won’t run again. When her term ends in January, the most-watched trading record in Washington stops updating.
One trade in that record shows exactly how big money controls a huge block of stock for a sliver of the price. It made roughly $4.8 million.
Below, I’m going to take that trade apart number by number, and explain why trades like it leave a footprint in the options market long before the filing shows up. Once you know that footprint exists, you can start looking for the next one yourself.
The Alphabet Trade
In June 2021, Paul Pelosi exercised 40 Alphabet call options with a strike price of $1,200, according to the congressional disclosure. That turned into 4,000 shares.
Alphabet was trading around $2,500 when he exercised, according to Bloomberg, so every share he could buy at $1,200 was worth about $1,300 more than he paid. Multiply that by 4,000 shares and the gain came to roughly $4.8 million.
Now look at what it took to get there. Buying 4,000 shares outright at $1,200 would have tied up $4.8 million. The options controlled the same shares for a fraction of that, and Forbes estimated the premiums may have cost only a few hundred thousand dollars.
The edge was in the structure: a long-dated option that controlled a big block of stock for a small slice of the price.
I’m not saying anybody did anything wrong.
Her office has said she doesn’t own stock and has no prior knowledge of her husband’s trades.
What I am saying is that trades like this leave a footprint in the options market, and you don’t have to wait weeks for a disclosure filing to see it. Members of Congress have up to 45 days to report a trade, and the penalty for filing late is $200.
I was on the floor of the Pacific Stock Exchange in October 1990, the day the CBOE launched the contract behind trades like this one. I’ve been reading those footprints ever since.
Pelosi’s Last Dance
Tomorrow, Tuesday, at 1pm Eastern, I’m releasing a research video to show you how I track those footprints, and the 3 stocks where I see them showing up right now.
It’s free, and once she leaves in January, this is your last chance to learn her playbook while it’s still being written.
Andrew Giovinazzi