Nancy Pelosi's Option Trades

13th Jan '22 by Alphaflight

3 comments 527 reads

I've just been looking at 81 year old Nancy's trades (see below filing). She has been doing remarkably well, making abnormal rates of returns (beating the market). Almost as if she has inside information.

This is my take on some of her trades (using last night’s closing prices); can anybody offer any meaningful insight here perhaps? To me it looks like she doesn't expect big price drops.

Alphabet-She still makes money at a less than 30% price drop by mid-September 2022. So if Alphabet drops 29%, her September GOOGL call option is ITM (still profitable). So she loses a lot of money if Google drops > ~30%...

Disney -Still makes money if markets drop < ~17% from here by September 2022.

Salesforce - Profitable if the markets drop < ~11% by 20th January 2023

Roblox - Profitable if the price rises > ~12% by 20th January 2023

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Snowbum

13th Jan '22

Looks like she has hedged her portfolio against a market correction using options to remain fully invested.

Micron Technolgies - MU hold a lot of BTC on their balance sheet so this would appear to be a an insurance against her own Bitcoin holdings? Or possibly a speculative position to capitalise on an expected price crash - MU trades around $93 currently.

Not an expert on options though at all, also interested in hearing from those with experience in the options market as I think in the U.K. we generally lack understanding g relative to our American counterparts.

Alphaflight

14th Jan '22

Hi Forbsy,

Thanks for the input I appreciate it :-)

I didn't know about Micron Technologies' large BTC exposure.

Perhaps she has existing short positions on say Alphabet, then these September 2022 call options would hedge against that.

I sometimes use options for hedging my big holdings. For example I hold GOOGL stocks, I bought them 8 years ago or so. When I’m feeling worried I’ll buy near term ATM (At the Money) put options and then roll them over*.

*Note that the reason I pay for relatively expensive options rather than using stop losses is because stop losses don’t work well if the market decides to melt down (as people found out in the 1987 crash…).

15th Jan '22

Hi Alpha,

Actually think I must confess to having mixed up my Micro’s here, it’s MicroStrategy that I was thinking of when I posted…

However, the main point is still relevant as during the last BTC crash in 2018, MU stock crashed in sympathy by approx 50% so it is sensitive to moves in cryptoland.

Thanks for the info and point made on your own use of options, it’s an area of the market I’ve tended to avoid but may dip a toe in over the coming years.

Nancy Pelosi's Option Trades

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Alphaflight

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