5 ms·

The article glosses over huge details. It sounds like he bought options back in May and some time between May 26 and June 21, he used the position to sell an op

The article glosses over huge details. It sounds like he bought options back in May and some time between May 26 and June 21, he used the position to sell an options contract which the buyer exercised on June 21. I'm not highly educated on the market, but it doesn't seem that unusual to me.

samspenc 5y ago
Yeah if the buyer exercised the right to buy the option, the seller has no choice, oftentimes it just "disappears" from their brokerage account and shares show up in the buyer's brokerage account. It's also possible he planned to roll the option to a future expiry date, but forgot to get around to it, resulting in the option landing ITM (In the Money) which allowed the buyer to exercise their option to buy.
- chris11 5y ago
  Details are kind of beside the point. Like you mentioned he could have had several trading strategies. He also could have changed his mind based on insider information. That's why I believe it would be much better to require politicians to file a public 10b5-1 type plan for investments.
  - AmericanChopper 5y ago
    If you had insider information that you though would adversely impact the price of a stock you’re holding, selling OTM calls against it would not be a valid way to attempt to offload your position. The thesis put forward in the article for why this is a suspect trade doesn’t make any sense, and seems to intentionally be conflating selling stock with being assigned.
- pbourke 5y ago
  The point is “don’t be fucking around with options if you’re a US Congressman trading options in a company regulated by your committee”. I favor the broader “Don’t be fucking around with derivatives or single names if you’re a US Congressperson”
hn_throwaway_99 5y ago
If you want to be a US Congressman, especially one on a cyber subcommittee, you shouldn't be trading options in individual tech stocks, period. Stick your money in an index retirement fund like the rest of the plebes.
- berniemadoff69 5y ago
  Correct - you get your spouse to make the trades.
  - gruez 5y ago
    Are they just that lazy at plugging loopholes for congressman? I have a hard time believing this works for normal insider trading cases.
  - fridif 5y ago
    Like Pelosi's husband and Hillary Clinton as well.
    - quickthrowman 5y ago
      Yep, insider trading is the only bipartisan thing in Congress these days.
      - fridif 5y ago
        A new Washington Consensus ;)
  - 404mm 5y ago
    I thought they passed a bill to make it not illegal for Reps to do insider trading.
    - ipaddr 5y ago
      Now you have to find someone to charge them.
latch 5y ago
Allowing politicians to trade stock is unusual in the "weird" sense. But certainly not unusual in the "uncommon" sense, see (1) from 3 months ago. Insider trading laws are awful, specifically because they only restrict a specific group of people with "insider" knowledge from trading. Removing information removes efficiency (especially when you selectively pick who can act on the information). (1) https://news.ycombinator.com/item?id=26821601 https://news.ycombinator.com/item?id=26821601

samspenc 5y ago

Yeah if the buyer exercised the right to buy the option, the seller has no choice, oftentimes it just "disappears" from their brokerage account and shares show up in the buyer's brokerage account. It's also possible he planned to roll the option to a future expiry date, but forgot to get around to it, resulting in the option landing ITM (In the Money) which allowed the buyer to exercise their option to buy.

chris11 5y ago
Details are kind of beside the point. Like you mentioned he could have had several trading strategies. He also could have changed his mind based on insider information. That's why I believe it would be much better to require politicians to file a public 10b5-1 type plan for investments.
- AmericanChopper 5y ago
  If you had insider information that you though would adversely impact the price of a stock you’re holding, selling OTM calls against it would not be a valid way to attempt to offload your position. The thesis put forward in the article for why this is a suspect trade doesn’t make any sense, and seems to intentionally be conflating selling stock with being assigned.
pbourke 5y ago
The point is “don’t be fucking around with options if you’re a US Congressman trading options in a company regulated by your committee”. I favor the broader “Don’t be fucking around with derivatives or single names if you’re a US Congressperson”

hn_throwaway_99 5y ago

If you want to be a US Congressman, especially one on a cyber subcommittee, you shouldn't be trading options in individual tech stocks, period. Stick your money in an index retirement fund like the rest of the plebes.

berniemadoff69 5y ago
Correct - you get your spouse to make the trades.
- gruez 5y ago
  Are they just that lazy at plugging loopholes for congressman? I have a hard time believing this works for normal insider trading cases.
- fridif 5y ago
  Like Pelosi's husband and Hillary Clinton as well.
  - quickthrowman 5y ago
    Yep, insider trading is the only bipartisan thing in Congress these days.
    - fridif 5y ago
      A new Washington Consensus ;)
- 404mm 5y ago
  I thought they passed a bill to make it not illegal for Reps to do insider trading.
  - ipaddr 5y ago
    Now you have to find someone to charge them.

latch 5y ago

Allowing politicians to trade stock is unusual in the "weird" sense. But certainly not unusual in the "uncommon" sense, see (1) from 3 months ago. Insider trading laws are awful, specifically because they only restrict a specific group of people with "insider" knowledge from trading. Removing information removes efficiency (especially when you selectively pick who can act on the information). (1) https://news.ycombinator.com/item?id=26821601 https://news.ycombinator.com/item?id=26821601