That’s a mighty fine coincidence. - Nancy Pelosi bought up to $1.25 million worth of $200 strike call options on Palo Alto Networks (a cybersecurity company that UHC used) on the same day (Feb 21, 2024) that United Healthcare had a ransomware attack. Brian Thompson investigated for insider trading..
(twitter.com)
🚔 Crime & Democrats 💸
Ok so these are the numbers:
She buys 1.25m with a $200 strike on 21 Feb, the share price is 261.94 close that day.
She has bought in the money calls ie $61.94 in the money. Its an aggressive move but not a super high leverage play, there is 61.94 intrinsic value in the calls.
By Feb 28 the shares have risen to $316.50, so she has made a $54.56 profit on intrinsic value alone (I cannot go back and get time value etc and can't access US options market history).
When looking at things like this you need to see the trade history of the individual ie do they often buy deep in the money calls? It a transaction of this size normal, did they close out for a quick profit?
Its an odd trade, if you really want to make big bucks you would have bought at or out of the money calls as you get far more leverage. She would have still had to outlay quite a bit of capital to take that position.
It really comes down to the history of the client and you go from there. If they always win on a trade like this alarm bells should ring but I guess she is exempt from insider trading it probably went no where.
I would love to be her broker, cos you would just follow her in across your client book.