27% profits every 20 days?
This is what Nic Chahine averages with his options buys. Not selling covered calls or spreads... BUYING options. Most traders don't even have a winning percentage of 27% buying options. He has an 83% win rate. Here's how he does it.
Former Speaker of the House of Representatives Nancy Pelosi, and her husband, venture capitalist Paul Pelosi, saw increased attention, recently disclosed the purchase of call options in cybersecurity company Palo Alto Networks Inc (NASDAQ:PANW) before and after recent second-quarter financial results.
Other members of Congress are also buying shares of the cybersecurity stock.
What Happened: According to a disclosure shared by Quiver Quant, Pelosi’s purchases were as follows:
- 50 call options PANW, strike price $200, expiration date Jan. 17, 2025, trade placed on Feb. 12
- 20 call options PANW, strike price $200, expiration date Jan. 17, 2025, trade placed on Feb. 21
Both trades were disclosed on Feb. 23 by Pelosi. The second transaction happened the day after Palo Alto Networks reported financial results and came as shares fell post-earnings.
Data from Quiver Quant shows that several other members of Congress have also been buying shares of the cybersecurity stock in the last several months.
- Rep. William Keating (D-Mass.): $1,000 to $15,000 PANW stock, trade placed Jan. 24
- Rep. Jonathan Jackson (D-Ill.): $50,000 to $100,000 PANW stock, trade placed Dec. 1
- Rep. Josh Gottheimer (D-N.J.): $1,000 to $15,000 PANW stock, trade placed Nov. 28
- Sen. Markwayne Mullin (R-Okla.): $15,000 to $50,000 PANW stock, trade placed Sept. 13, $1,000 to $15,000 PANW stock, trade placed Oct. 3
- Rep. John Curtis (R-Utah): $1,000 to $15,000 PANW stock, trade placed Sept. 13
Data from CapitolTrades also shows the following transactions:
- Rep. Ro Khanna (D-Calif.): $1,000 to $15,000 PANW stock on Jan. 10, $1,000 to $15,000 PANW stock on Jan. 10 (separate trade), $1,000 to $15,000 PANW stock on Nov. 13
Related Link: 10 Best Stock Traders In Congress In 2023 (Spoiler: Nancy Pelosi Has Reentered The Chat)
Why It's Important: The trading activity of members of Congress continues to generate headlines and attention from traders, with potential conflicts of interest and trades being done with knowledge not available to the public.
Another item that could jump out to investors in regard to the trading disclosure by Pelosi and other recent transactions is a comment from Palo Alto Network's CEO during the recent earnings call.
"The CEO of $PANW recently said that they are hoping for a major government contract," Quiver Quant tweeted.
Palo Alto Networks saw shares drop after reporting revenue and earnings per share that beat Street consensus estimates, while also reporting guidance that came in weaker than expected.
Investors should note that Pelosi was listed as one of the 10 best trading members of Congress in 2023, as tracked by UnusualWhales. Gottheimer and Khana also had some of the most profitable trades during the last year.
Gottheimer ranked first, second, third and ninth on the list of the 10 best trades in 2023 with trades connected to the stock of Meta Platforms, Monster Beverage Corporation and NVIDIA Corporation (NASDAQ:NVDA). Two trades in Meta and the trade in Monster were each up over 100% in 2023 according to the report.
Khanna had the fourth-best trade of the year with a 55.5% gain from a trade-in Nividia Corp.
Pelosi has one of the best trades in Nividia in recent months, with a trade made in late 2023 up over $1 million currently for her and her husband.
There is no guarantee that any of the members of Congress have any knowledge or information to why Palo Alto Networks shares could be undervalued. The trades could be a bet on growth of the cybersecurity sector.
The trades also come as the government has put in effect new regulations on how companies must protect themselves from cybersecurity incidents and disclose attacks after they happen.
Leading healthcare company UnitedHealth Group (NYSE:UNH) recently disclosed a cybersecurity attack made by ransomware group Blackcat on its Change Healthcare unit. The company disclosed that it is working with Alphabet-owned Mandiant and Palo Alto Networks to address the matter.
Several analysts lowered their price targets on Palo Alto Networks after second-quarter earnings results and guidance.
While following the trades of members of Congress won't always be profitable, seeing a stock that is bought by three of the top names in Congress when it comes to profitable trades should draw the attention of traders.
PANW Price Action: Palo Alto Networks shares trade at $302.40 versus a 52-week trading range of $176.30 to $380.84. Shares of Palo Alto Network are up 62% over the last year
Image: Shutterstock
27% profits every 20 days?
This is what Nic Chahine averages with his options buys. Not selling covered calls or spreads... BUYING options. Most traders don't even have a winning percentage of 27% buying options. He has an 83% win rate. Here's how he does it.
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