Unusual Stock Trading by Whales in US Congress • Hacker News Board

Re: Unusual Stock Trading by Whales in US Congress

#321

Post by Avalaxy » Thu, Apr 15, 2021, 8:25 PM UTC

wpietri wrote: post #100

sakopov wrote: post #15

> For example, Pelosi in Dec 22 was against more stimulus. Her husband buys deep ITM TSLA and AAPL calls that day. December 23rd, she is suddenly for stimulus again, with those same companies ralling 5%, giving her an instant +30 return. > Congressman Gottheimer is absolutely an incredible options trader. He’s been selling calls at peaks on $MSFT all 2021, & seemingly buying back the contracts on dips. This in blocks…

Whatever the behind-the-scenes truth, I think the appearance of conflicting interests is a problem regardless. For a lot of elected offices and high public service positions, I think their wealth should be put into a blind trust, one constrained by law to buy broad, boring things like index funds. That would surely be a problem for some individuals. But I don't think it's a systemic problem. We only need to find 0.00…

Would it really help? You can't restrict their complete social circles as well. All it takes is 1 willing friend who will happily accept your stock tips ahead of large announcements and who's willing to give you a share of the profits in return.

Re: Unusual Stock Trading by Whales in US Congress

#322

Post by cpwright » Thu, Apr 15, 2021, 8:26 PM UTC

throwawaygh wrote: post #194

psychlops wrote: post #151

Earlier quoted context omitted.

Just require them to announce their trades publicly 24 hours in advance. And let them manage their own finances. All these shenanigan's would disappear.

Why not just prohibit members of Congress of owning stock? They are some of the most powerful people in the world. Why is it so much to ask that a Senator or especially Representative serving in the most powerful legislative body in the world just take a cash position for 2-6 years?

That is bad policy. There is a segment of middle/upper class Americans who own stock; anyone with a retirement plan that funds it. Forcing middle/upper class legislatures into a cash position instead of stocks would make them less, not more connected to similarly placed people. If they can't own stock does that mean they'll just instead invest in real estate which can be even more conflicted?

Of course, if they held widely diversified Index funds there would be fewer conflicts - but not zero as evidenced by legislators trading around COVID briefings.

Re: Unusual Stock Trading by Whales in US Congress

#323

Post by rocqua » Thu, Apr 15, 2021, 8:26 PM UTC

rootusrootus wrote: post #150

nitrogen wrote: post #134

Earlier quoted context omitted.

We only need to find 0.00013% of the US population Maybe we should use sortition then instead of elections? What could be more democratic than random average people (meeting some criteria) taking a turn at the wheel?

I agree, I have long thought sortition might be the right answer. Right along with leveraging modern technology to reset our representative-to-citizen ratio to something like the constitution originally prescribed.

The thing is, the last few times I recall when some have tried more direct democracy (Brexit, a few referenda in europe, california ballot measures) it seems to lead to decisions that seem rather sub-optimal. I am not sure the random citizen might actually be better at governing that a professional politician.

Re: Unusual Stock Trading by Whales in US Congress

#324

Post by rsync » Thu, Apr 15, 2021, 8:28 PM UTC

finexplained wrote: post #300

rsync wrote: post #288

Earlier quoted context omitted.

"... long only ..." Can we please stop perpetuating the myth that short selling, or holding short positions, is some kind of exotic or shady or villainous activity ? It's not. Short selling, and the holding of short positions, is value neutral and is part of a healthy properly functioning marketplace. I don't know what politicians should or should not be doing but a long vs. short distinction is silly.

My apologies, it wasn't my intent to imply that myth. I actually completely agree with your position on short selling. At the time of writing it just seemed a bit weird to me, and possibly an incorrect alignment of interests, for a US politician to take a short position in SPY...

OK, actually that's interesting - if they are restricted to SPY (for instance) then it would, indeed, be a bad look if they went short ...

Re: Unusual Stock Trading by Whales in US Congress

#325

Post by AlwaysRock » Thu, Apr 15, 2021, 8:28 PM UTC

wpietri wrote: post #100

sakopov wrote: post #15

> For example, Pelosi in Dec 22 was against more stimulus. Her husband buys deep ITM TSLA and AAPL calls that day. December 23rd, she is suddenly for stimulus again, with those same companies ralling 5%, giving her an instant +30 return. > Congressman Gottheimer is absolutely an incredible options trader. He’s been selling calls at peaks on $MSFT all 2021, & seemingly buying back the contracts on dips. This in blocks…

Whatever the behind-the-scenes truth, I think the appearance of conflicting interests is a problem regardless. For a lot of elected offices and high public service positions, I think their wealth should be put into a blind trust, one constrained by law to buy broad, boring things like index funds. That would surely be a problem for some individuals. But I don't think it's a systemic problem. We only need to find 0.00…

If you took away the politicians way of getting rich then what motivation would people have to be politicians? /s

Re: Unusual Stock Trading by Whales in US Congress

#326

Post by foolinaround » Thu, Apr 15, 2021, 8:29 PM UTC

Where there is a will, there is a way!

As long as we have crooks as our representatives, they will find various loopholes to cheat.

Caesar’s Wife Must Be Above Suspicion.

When we find such folks, since the media won't ask those questions, the constituents must call/write/email their offices and know that they are being watched.

Re: Unusual Stock Trading by Whales in US Congress

#327

Post by smooth_remmy » Thu, Apr 15, 2021, 8:29 PM UTC

Isn't there a delay in seeing these trades? They're reported 2 months after they happen, right?

Re: Unusual Stock Trading by Whales in US Congress

#328

Post by Yoofie » Thu, Apr 15, 2021, 8:30 PM UTC

BurningFrog wrote: post #293

akudha wrote: post #153

Earlier quoted context omitted.

Isn't Pelosi worth like 100 million or something? How much money is enough for these people? :( How quickly are these trades made public? Maybe we should just copy the congress people's trades and make some profit ourselves :P

Any sum is fine as long as you got it honestly. The problem with Pelosi and others is that the money comes from abusing their power, and is in effect taken from other investors.

The most amazing thing is that these people keep getting re-elected. The voters are the ones allowing this to happen.

Re: Unusual Stock Trading by Whales in US Congress

#329

Post by SilasX » Thu, Apr 15, 2021, 8:30 PM UTC

ABeeSea wrote: post #307

SilasX wrote: post #297

Earlier quoted context omitted.

So, back to the original question: wouldn't OTM options make more sense in their position?

If the bet is wrong, OTM options expire worthless. ITM options give you less risk, but for a premium (you buy fewer contracts with the same amount of money). But still with more leverage than outright buying the stock. This is captured in the concept of Delta one of the “greeks” which is a parameter in the black scholes equation and solution that tries to measure the pricing movement of the option relative to the pri…

Fair enough, but then if you’re having to hedge that much against downside risk, it doesn’t feel like insider trading. The whole problem with insider trading is that have special knowledge of which way it’s going to go. At the point where you’re having to protect against the possibility of being so wrong, that doesn’t feel like acting on insider knowledge, and it’s more like “interested outsider” trading.

Re: Unusual Stock Trading by Whales in US Congress

#330

Post by snarf21 » Thu, Apr 15, 2021, 8:31 PM UTC

wpietri wrote: post #100

sakopov wrote: post #15

> For example, Pelosi in Dec 22 was against more stimulus. Her husband buys deep ITM TSLA and AAPL calls that day. December 23rd, she is suddenly for stimulus again, with those same companies ralling 5%, giving her an instant +30 return. > Congressman Gottheimer is absolutely an incredible options trader. He’s been selling calls at peaks on $MSFT all 2021, & seemingly buying back the contracts on dips. This in blocks…

Whatever the behind-the-scenes truth, I think the appearance of conflicting interests is a problem regardless. For a lot of elected offices and high public service positions, I think their wealth should be put into a blind trust, one constrained by law to buy broad, boring things like index funds. That would surely be a problem for some individuals. But I don't think it's a systemic problem. We only need to find 0.00…

I agree that ALL government employees, their spouses and companies should own no individual stocks until they leave office/job. However, the politicians are just the tip of the iceberg in regards to the rigged game of Wall Street. We have bigger fish to fry but no one seems to like fish anymore.