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Politician with most suspicious trades just bet against this stock

Politician with most suspicious trades just bet against this stock

In recent times, US Senator Tommy Tuberville has found himself under scrutiny by popular social media accounts, earning the dubious distinction as an American politician with the highest number of suspicious stock trades

Notably, Tuberville had been a vocal critic of proposals to ban congressional stock trading, dismissing them as “ridiculous” and warning of potential deterrents for public service. 

Today, on December 18, we turn our attention to the latest stock transactions involving the senior US Senator, detailing his several divestments, as well as a newly revealed bearish bet against a well-known company.

Tuberville sold puts against MSFT, AMAT, and other companies

As highlighted by the popular finance news account unusual_whales on December 17, Senator Tuberville recently made several new options trades against US companies. 

Options are financial contracts that grant the holder the right, but not the obligation, to buy (call option) or sell (put option) a company’s stock at a predetermined price within a specified timeframe. Traders often use these instruments to speculate on price movements, hedge existing positions, or generate income.

According to unusual_whales, Tuberville closed or sold put options for multiple stocks, including Microsoft (NASDAQ: MSFT), Applied Materials (NASDAQ: AMAT), Bristol-Myers Squibb Company (NYSE: BMY), Microchip Technology (NASDAQ: MCHP), and Occidental Petroleum (NYSE: OXY), among others. 

Simultaneously, the politician purchased put options tied to United States Steel Corp (NYSE: X) for $15,000, which are set to expire on June 6, 2024. 

Senator Tuberville’s recent option transactions. Source: unusual_whales

The strike price of these contracts is $20, meaning Tuberville has the right to sell the shares of X at a price of $20 apiece before the option’s expiration date. 

In other words, the Senator expects X’s stock price to fall below $20, allowing him to sell it at a higher price than the market value at that future point in time.

U.S. Steel shares surge X% in premarket

Unusual Whales’ post revealing Senator Tuberville’s purchase of X puts comes on the same day it was reported that U.S. Steel will be acquired by Japanese steel manufacturer Nippon Steel for $14.9 billion.

The offer values the steelmaker at a significant premium of about 40% to its latest closing price, sending the stock surging more than 28% ahead of the market open on Monday. 

However, according to the image shared by Unusual Whales, the actual date Tuberville filed for these puts is November 7, 2023, more than a month before the deal’s announcement. 

Given that buying puts against U.S. Steel means he expected a downturn in the company’s stock, today’s surge in the company’s share price suggests that Tuberville’s investment is currently at a loss. 

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