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Unusual Stock Trading by Whales in US Congress

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Re: Unusual Stock Trading by Whales in US Congress

#361

Post by pessimizer »

djrogers wrote: post #345
pessimizer wrote: post #338

Earlier quoted context omitted.

https://en.wikipedia.org/wiki/STOCK_Act#Amendment When the public was angry, Congress passed the STOCK act. After the news cycle was over, they repealed disclosure unanimously.

Disclosure still applies for Congress (and POTUS/VP), it was repealed for 28k other gov't employees. Also, it's mandated 45 days after trades - not in advance as many here are calling for.

Not being specific enough made my comment misleading.

"The amendment also eliminated the requirement for the creation of searchable, sortable database of information in reports, and the requirement that reports be done in electronic format, rather than on paper."

Re: Unusual Stock Trading by Whales in US Congress

#362

Post by onemiketwelve »

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…

An insider trade like this isn't about managing risk and things expiring worthless, it's about maximizing expected value while not making it too sus.

If you bought a deep itm call, it would behave almost exactly like owning a share. The stock goes up 5% , your call goes up 5% + 1% let's say for the increased iv.

If you felt like there was a 75% chance it would go up 5% and a 25% chance it goes flat or down, then your best expected value would be buying a otm call. The math would look something like ev= .75 * 400% + .25 * -100%

And even then, nobody holds an option that went the wrong way to 0, so the -100% term would be less as well.

Re: Unusual Stock Trading by Whales in US Congress

#363

Post by jimbob45 »

mabbo wrote: post #9

The very people whose job it should be to stop this sort of thing are the ones who are profiting from it. How do you change this? No really, how can we force congress to change the rules so that elected officials can't profit from inside information? Why would they ever vote for such a bill?

Pragmatically? Make such a proposal go viral and delay its enforcement for 6 years so that current senators don’t feel the heat until it’s too late.

Re: Unusual Stock Trading by Whales in US Congress

#364

Post by jimbob45 »

SavantIdiot wrote: post #316
mabbo wrote: post #9

The very people whose job it should be to stop this sort of thing are the ones who are profiting from it. How do you change this? No really, how can we force congress to change the rules so that elected officials can't profit from inside information? Why would they ever vote for such a bill?

You cannot. As long as there are rigged markets and cadres of elites, we can truly do nothing. Sad, really. Not helping the matter is half of the US is below average intelligence and will elect crooks because they say the right things. If only there were more Ron Wydens and AOCs. But you see red states electing nutjobs who barely have high school degrees (Boeber) because they shout the loudest.

Wyden and AOC enjoy the luxury of not having to worry about re-election due to residing on extremely blue states. They would not be so bold if they represented Texas or Florida, for example.

The same goes for Republican representatives in highly red states.

Re: Unusual Stock Trading by Whales in US Congress

#365

Post by whatshisface »

Kranar wrote: post #103
munk-a wrote: post #77

Earlier quoted context omitted.

We elect people who actually believe in governance instead of people out to make a buck. I know that everyone's going to act in their own interest (that's sorta how interests are defined) but some people feel a legitimate duty and loyalty to country and welfare above their own personal comfort - these people tend to be torpedoed very early on in US politics because they refuse to cozy up to special interests to play…

Meh, a lot of the people you're describing are incredibly incompetent and succumb to simplistic ideologies. Over the long run they end up in the same position that everyone we're complaining about ends up in. While not entirely related, I remember a study by the U.S. military during the Vietnam war that said the worst performing soldiers were the ones who were patriotic and served due to a sense of duty. I'm simplify…

>Competency, skills, leadership, those are qualities that result in change... having a good heart and believing in or trying to execute various altruistic ideologies is basically a loser's game.

If you are competent, skilled, and a leader, but are not altruistic, you will end up being a very competent, very skilled leader of a burglary operation. ;)

Re: Unusual Stock Trading by Whales in US Congress

#366

Post by alkonaut »

Avalaxy wrote: post #321
wpietri wrote: post #100

Earlier quoted context omitted.

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.

That’s true for all insider trading yet we at least attempt to limit that.

Re: Unusual Stock Trading by Whales in US Congress

#367

Post by jcranmer »

kelnos wrote: post #333
sneak wrote: post #174

Earlier quoted context omitted.

I'm not sure that has ever been true, or ever been the goal. The American government does serve the interests of the American people: the American people who own the bulk of the land and the largest companies. George Washington was the largest landowner in the colonies when the revolution started.

Right, and in the very beginning, only some single-digit percent of the people living in the US were eligible to vote. Women, slaves, non-landowners, etc. did not have the right to vote. The idea that the US was originally founded "by the people, for the people" is not at all what happened. I guess we could say that the government they created was progressive for its time, at least.

> Right, and in the very beginning, only some single-digit percent of the people living in the US were eligible to vote. Women, slaves, non-landowners, etc. did not have the right to vote.

Slaves would not have been a large proportion of the country as a whole--about 20% at their height. While the early US did require landownership for adult free males to vote, the US also had unusually high landownership rates. It's estimated that ~60% of free adult males had the right to vote (contemporary Britain had about 15-20% of free adult males having that same rate). So ultimately you end up with about 25% of the current franchise rate, or somewhere in the mid-high teens after taking into account the existence of children who still cannot vote.

Re: Unusual Stock Trading by Whales in US Congress

#368

Post by labcomputer »

ABeeSea wrote: post #204
SilasX wrote: post #201

Earlier quoted context omitted.

>Her husband buys deep ITM TSLA and AAPL calls that day. Stupid question: if you were expecting an upswing in a stock, wouldn't you get the most returns from an out of the money option? For a deep ITM you're paying the same as the underlying stock plus a tiny premium -- you might as well just buy the stock.

A large swing increases the IV which increases the premium (since the stock is now more likely to swing back down). Also decreases the risk in case the trade moves against you.

Sure, but if that's your investment thesis you'll get a better return by buying an ATM call than a (relatively safer) deep ITM call.

Re: Unusual Stock Trading by Whales in US Congress

#369

Post by jb775 »

Swenrekcah wrote: post #304
jb775 wrote: post #277

Earlier quoted context omitted.

Can you provide any sources for your claims that prove Trump administration personnel directly profited off any supposed self dealings? Or are you just pulling this out of your ass bc you are a lib? Also, who else specifically do you "speak for"? This article isn't even about self-serving decisions that may benefit politicians down the road...it's about politicians who are actively using politician-privy inside infor…

The “orange man” was bad. This is getting tired. If you are interested in his cronies’ self dealings just look it up. They did all of these things and more but also did them more explicitly. Which is a bit more honest in a way I guess? But the worst part about 2017-2020 was the way he cozied up to enemies of democracy, undermined democracy himself and made a point of sowing and igniting division. Back to the article,…

> just look it up. They did all of these things and more

Can you provide a single example with a source that proves this? And please provide an example of how he "undermined democracy". Sounds like you watch a lot of CNN.

I agree it should be punished equally not depending on D or R.

Re: Unusual Stock Trading by Whales in US Congress

#370

Post by dmurray »

psychlops wrote: post #335
icedchai wrote: post #294

Earlier quoted context omitted.

Do you actually "have to"? How would they know if you don't? Basically, is it an honor system?

20 years ago it used to be the honor system. Now all the records are connected, many make it a requirement of employment to move all accounts into the firm.

Also, it's mandated by the SEC. There are obligations on you, your employer, and (if your broker is in the US) your broker to ask you, and to inform each other.

So it's kind of on the honour system - your broker probably won't ask you for payslips proving you don't work in the industry - but a lot of people are incentivized not to let it happen.

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