Nancy Pelosi's (D-CA) incredible luck at beating the stock market is bringing fresh scrutiny of insider trading in Congress.

Pelosi and her husband Paul saw a stunning 65% gain in 2023, beating the S&P 500 index by more than double. In fact, the Pelosis performed better than many major hedge funds.

Pelosi's AMAZING luck...

The Pelosi have made huge profits from their investments in tech companies like the chipmaker NVIDIA.

Paul Pelosi had dumped NVIDIA stock at a loss in 2022 as Congress prepared to vote on Joe Biden's semiconductors bill.

However, it looks like the Pelosis are finished keeping up appearances. The couple bought another $2 million in NVIDIA options late last year using a "deceptive tactic."

“Pelosi bet millions on NVDA in November using call options. Using a deceptive tactic, she purposely disclosed this on the Friday before Christmas weekend to avoid media coverage,” Congresstrading.com wrote on X.

Red flag

Financial experts say Pelosi's extravagant use of call options is a red flag for corruption.

“It’s a sign of quasi-insider trading that’s corrupt and should be banned – it’s either an addiction to risk or a sign of corruption,” Jeff Hauser, founder and director of the Revolving Door Project said.

“There are teams of people at sophisticated hedge funds that exist to find minor arbitrage opportunities to make a profit. It’s preposterous to think they are finding profit where Bridgewater or Renaissance Capital is missing it,” Hauser added.

Call options give the right but not the obligation to buy a stock at a later date for a fixed price.

“This can be advantageous when you anticipate the value of the asset will rise, allowing you to buy it at a lower, predetermined cost,” Justin Rush, a financial planner with the Michigan-based family wealth management firm Nemes Rush, told the New York Post. 

Ban? Don't count on it

Lawmakers must report their stock holdings, but they are legally free to trade.

In late 2021, Nancy Pelosi defended her right to trade as a member of the "free market" but eventually backed a watered-down ban that went nowhere.

Despite a lot of sound and fury, members of Congress have shown fleeting interest in banning themselves from trading stock.

The lack of urgency is not very shocking.