5 ms·

I'm all for the pitch forking when it makes sense, but the congressman has a decent out which wouldn't be hard to prove. > In the audio recording, Fallon backe

I'm all for the pitch forking when it makes sense, but the congressman has a decent out which wouldn't be hard to prove. > In the audio recording, Fallon backed this up by outlining the trade as an option call in which he purchased a block of $250,000 in Microsoft shares on May 26, and subsequently sold the rights to other investors to purchase at a later date. Those other investors chose to purchase the shares on June 21, according to disclosure reports, effectively liquidating Fallon's position in the company just two weeks before the high-profile JEDI contract fell through. He purchased a bunch of stock, or ITM (in the money) options - either way he then sold covered call options (good safe bet). Those sold call options went ITM and someone exercised forcing his position to be liquidated. Purchase a stock, sell call options to make a bit more money or as a "hedge" against the stock going down. Either way, classic strategy. It didn't really work this time because the stock went up too far, out of his expectation which limits the gains to the value of the options sold. But again, it's a relatively safe strategy.

refenestrator 5y ago
If taking the job of congressperson required a blind trust, it wouldn't be an issue.
RobRivera 5y ago
100% well demonstrated. plain old covered calls selling.
foobarbazetc 5y ago
It doesn’t even matter because Congresspeople can “insider” trade like this —- it’s not illegal. I think Sen Gillibrand has a bill to address this called the STOCKS Act which she introduces every Congress but it never goes anywhere.
- nr2x 5y ago
  Exactly, insider trading for congresspeople is totally legal and utterly unethical.
- irjustin 5y ago
  Right, I'm all for public disclosure as well as insider trading laws against congress. This specific article isn't a good example and should not be used an argument towards that end.
- pmorici 5y ago
  The STOCK act was passed and signed into law in 2012. It prohibits members of Congress from trading on inside information. https://en.wikipedia.org/wiki/STOCK_Act https://en.wikipedia.org/wiki/STOCK_Act
  - nixpulvis 5y ago
    I'm so damn confused right now. Why hasn't this been used to fucking nail so many politicians!? We keep hearing so many stories, I honestly believe that Gillibrand could be working on a new bill with an appended 'S'; hoping it somehow changes something. Our political system here in the U.S.A. is kinda fubar isn't it...
    - nixpulvis 5y ago
      OK, it looks like it's called "Stock Act 2.0" [0] and it's targeting reporting "benefits" gained from government ties. I'll be curious if they ever work out a definition for "benefit" here. [0]: https://www.gillibrand.senate.gov/news/press/release/icymi-gillibrand-in-buffalo-news-stock-act-20-will-require-new-transparency-in-congress https://www.gillibrand.senate.gov/news/press/release/icymi-g...
    - busymom0 5y ago
      2013: How Congress Quietly Overhauled Its Insider-Trading Law https://www.npr.org/sections/itsallpolitics/2013/04/16/177496734/how-congress-quietly-overhauled-its-insider-trading-law https://www.npr.org/sections/itsallpolitics/2013/04/16/17749... Putting in laws are only as useful as them getting actually enforced.
      - nixpulvis 5y ago
        > "The database itself is almost meaningless," says Holman. He says the only option for those who want to get a comprehensive look at what some 2,900 staffers have filed is to review the cases one by one. "And that's just too big a job for anybody to do." Oh God. I'm learning a lot about this I didn't know tonight, thanks. Ironically, as someone who would like government to employ smarter and more successful people, I'm left wondering how much of their finances we can and should expose. But given how corrupt things seem it feels like we still need to push on this. Now before I start trying to imagine a way two high power congress members could game the public information requirements between each other, I should go to sleep.
- blowski 5y ago
  It’s how democracy _should_ work. People caught with their fingers in the till are booted out of office. Instead, they have enough partisan support that it doesn’t seem to matter.
  - voidfunc 5y ago
    Nothing about democracy implies morality, ethics, or lack of corruption. Its only a system of electing people and as you noted if the politicians constituents dont care it doesn’t really matter what he or she does as it’s effectively a sanctioned activity.
    - blowski 5y ago
      If you want to be pedantic, then it doesn’t even imply elections. Democracy is merely the idea that the right to rule is distributed across all those who are ruled, not just some arbitrary group. Elections are a way of distributing power in this way. But what I was getting at is that is that we shouldn’t have or even try to have rules for every single thing an elected official can or can’t do. It’s not a good way of running a system of government. Elected officials should be accountable to their whole electorate. But instead, they are accountable only to their core constituency, everybody else be damned. And their constituency doesn’t care about effective government, only about absurd ideological issues they’ve been whipped into caring about by a collaborative media.
xrd 5y ago
Is it at all possible that this kind of trading can be used to conceal "lucky outcomes" when needed and have a plausible deniability? For example, is there no way that the call options could be purchased on the other side by a friendly party that is a participant in the game? Does the market absolutely prevent this kind of thing from happening? If not, could this a be way that senators (from both parties of course!) could conceal their insider trading?
- fnordfnordfnord 5y ago
  You'd have to have the insider information far in advance. >is there no way that the call options could be purchased on the other side by a friendly party that is a participant in the game? Not for retail traders. I sell covered calls a lot and I never know who buys them.
  - quickthrowman 5y ago
    Citadel or another MM is almost always the other party in an options trade
    - fnordfnordfnord 5y ago
      Yup, that's my understanding as well.
- HWR_14 5y ago
  Basically, in this case, you should look at the date that he sold the options, instead of the day of the sale. Since it was under a month of ownership, it seems suspicious to me.
  - irjustin 5y ago
    Why does that seem suspicious?
    - HWR_14 5y ago
alkonaut 5y ago
I’m all for not putting pitchforks down until senior politicians either have to divest (use index funds or similar) or put their assets under neutral management. The idea that congressmen can invest in the companies they regulate is absurd. I can’t get how there is majority support for it.

refenestrator 5y ago

If taking the job of congressperson required a blind trust, it wouldn't be an issue.

RobRivera 5y ago

100% well demonstrated. plain old covered calls selling.

foobarbazetc 5y ago

It doesn’t even matter because Congresspeople can “insider” trade like this —- it’s not illegal. I think Sen Gillibrand has a bill to address this called the STOCKS Act which she introduces every Congress but it never goes anywhere.

nr2x 5y ago
Exactly, insider trading for congresspeople is totally legal and utterly unethical.
irjustin 5y ago
Right, I'm all for public disclosure as well as insider trading laws against congress. This specific article isn't a good example and should not be used an argument towards that end.
pmorici 5y ago
The STOCK act was passed and signed into law in 2012. It prohibits members of Congress from trading on inside information. https://en.wikipedia.org/wiki/STOCK_Act https://en.wikipedia.org/wiki/STOCK_Act
- nixpulvis 5y ago
  I'm so damn confused right now. Why hasn't this been used to fucking nail so many politicians!? We keep hearing so many stories, I honestly believe that Gillibrand could be working on a new bill with an appended 'S'; hoping it somehow changes something. Our political system here in the U.S.A. is kinda fubar isn't it...
  - nixpulvis 5y ago
    OK, it looks like it's called "Stock Act 2.0" [0] and it's targeting reporting "benefits" gained from government ties. I'll be curious if they ever work out a definition for "benefit" here. [0]: https://www.gillibrand.senate.gov/news/press/release/icymi-gillibrand-in-buffalo-news-stock-act-20-will-require-new-transparency-in-congress https://www.gillibrand.senate.gov/news/press/release/icymi-g...
  - busymom0 5y ago
    2013: How Congress Quietly Overhauled Its Insider-Trading Law https://www.npr.org/sections/itsallpolitics/2013/04/16/177496734/how-congress-quietly-overhauled-its-insider-trading-law https://www.npr.org/sections/itsallpolitics/2013/04/16/17749... Putting in laws are only as useful as them getting actually enforced.
    - nixpulvis 5y ago
      > "The database itself is almost meaningless," says Holman. He says the only option for those who want to get a comprehensive look at what some 2,900 staffers have filed is to review the cases one by one. "And that's just too big a job for anybody to do." Oh God. I'm learning a lot about this I didn't know tonight, thanks. Ironically, as someone who would like government to employ smarter and more successful people, I'm left wondering how much of their finances we can and should expose. But given how corrupt things seem it feels like we still need to push on this. Now before I start trying to imagine a way two high power congress members could game the public information requirements between each other, I should go to sleep.
blowski 5y ago
It’s how democracy _should_ work. People caught with their fingers in the till are booted out of office. Instead, they have enough partisan support that it doesn’t seem to matter.
- voidfunc 5y ago
  Nothing about democracy implies morality, ethics, or lack of corruption. Its only a system of electing people and as you noted if the politicians constituents dont care it doesn’t really matter what he or she does as it’s effectively a sanctioned activity.
  - blowski 5y ago
    If you want to be pedantic, then it doesn’t even imply elections. Democracy is merely the idea that the right to rule is distributed across all those who are ruled, not just some arbitrary group. Elections are a way of distributing power in this way. But what I was getting at is that is that we shouldn’t have or even try to have rules for every single thing an elected official can or can’t do. It’s not a good way of running a system of government. Elected officials should be accountable to their whole electorate. But instead, they are accountable only to their core constituency, everybody else be damned. And their constituency doesn’t care about effective government, only about absurd ideological issues they’ve been whipped into caring about by a collaborative media.

xrd 5y ago

Is it at all possible that this kind of trading can be used to conceal "lucky outcomes" when needed and have a plausible deniability? For example, is there no way that the call options could be purchased on the other side by a friendly party that is a participant in the game? Does the market absolutely prevent this kind of thing from happening? If not, could this a be way that senators (from both parties of course!) could conceal their insider trading?

fnordfnordfnord 5y ago
You'd have to have the insider information far in advance. >is there no way that the call options could be purchased on the other side by a friendly party that is a participant in the game? Not for retail traders. I sell covered calls a lot and I never know who buys them.
- quickthrowman 5y ago
  Citadel or another MM is almost always the other party in an options trade
  - fnordfnordfnord 5y ago
    Yup, that's my understanding as well.
HWR_14 5y ago
Basically, in this case, you should look at the date that he sold the options, instead of the day of the sale. Since it was under a month of ownership, it seems suspicious to me.
- irjustin 5y ago
  Why does that seem suspicious?
  - HWR_14 5y ago

alkonaut 5y ago

I’m all for not putting pitchforks down until senior politicians either have to divest (use index funds or similar) or put their assets under neutral management. The idea that congressmen can invest in the companies they regulate is absurd. I can’t get how there is majority support for it.