Pelosi’s husband bought Google, Disney call options that would pay off if bull market continues

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US House Speaker Nancy Pelosi’s husband could be in a position to profit from the continuing rise in share prices of some of America’s biggest companies.

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The California Democrat’s husband, Paul Pelosi, bought call options that gave him Google parent Alphabet, Inc. Gives the right, but not the obligation, to buy shares in GOOG. GOOG,
-0.06%,
Memory-chip company Micron Technology Inc. mu,
-1.54%,
Salesforce.com Inc. crm,
+0.80%
and Walt Disney Corp. Dis,
+0.95%
According to one, at prices 45% below their closing trading level on the day they transacted periodic transaction report filed with the Government.

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Federal law requires members of Congress to file reports within 45 days of when they or their spouses buy or sell securities worth more than $1,000, as well as an estimate of how much the transaction is worth. Why was it?

Pelosi purchased call options worth $1 million in Alphabet stock with a strike price of $500,000 and an expiration date of September 16, 2022, approximately 30% lower than the stock’s closing price on December 17, 2021. Transactions as per factset. He bought a call option between $250,000 and $50,000 in Micron shares with a strike price of $50 and a similar expiration date, which was approximately 45% lower than the closing price on December 21, the day of the transaction.

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Speaker’s husband purchased shares of Salesforce with a strike price of $210 and an expiration date of January 20, 2023 in call options for between $600,000 and $1.25 million, approximately 15% above the stock’s closing price of 247.21 on the day of the transaction. was less. 20 December. He bought call options worth $100,000 and $250,000 in Walt Disney shares with a strike price of $130 and an expiration date of September 16, 2022, about 13% less than the stock’s closing price of $148.76. Transactions, December 17.

The value of call options has increased substantially in recent days as the market has bounced back from Santa Claus’s late rally. Purchasing a call option with a strike price below the market price requires the payment of a large up-front premium that accounts for the difference, but that premium can act as leverage which then increases the price. But can work to increase profit. The value of each of the companies listed in the report has increased since Pelosi made the purchase.

Stock trading by members of Congress and their family members has become the subject of public debate over the past year following several instances when they were accused of using non-public information collected in the course of their duties to profit from stock trades. has been applied.

In October, the Congressional Ethics Office concluded that there is “sufficient reason to believe” that the wife of Pennsylvania Republican Rep. Mike Kelly used nonpublic information prior to purchasing stock in the Ohio steelmaker.

In 2012, Congress passed the Stocks Act, signed into law by then-President Obama, which made it illegal to use non-public information to trade securities. But in the nearly ten years since the law’s passage, no one has been prosecuted under it.

Earlier this month, Pelosi argued against tougher measures, such as outright banning members of Congress and their families from trading individual shares. “We are a free market economy. They should be able to participate in it,” Pelosi said.

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