Business
Pelosis stands to profit $1.6 million from Nvidia investment bet
By Jake Beardslee · February 29, 2024
In brief…
- Paul Pelosi bought valuable Nvidia call options worth up to $5 million in November
- Experts estimate the trade could net over $1.6 million profit for the Pelosis
- The Pelosis have faced criticism over trading individual stocks in Congress
- The trade highlights how the wealthy earn outsized returns from options trades
- Professor Coldiron called it a smart trade but one unavailable to average investors
A recent financial disclosure filing reveals that House Speaker Nancy Pelosi and her husband Paul Pelosi stand to profit over $1 million from a lucrative investment in Nvidia, a Silicon Valley tech company. According to the filing, Paul purchased Nvidia call options worth between $1-5 million in November 2023. Call options grant the holder the right, but not the obligation, to buy a stock at a set “strike” price before a set expiration date.
Though the exact details are undisclosed, finance experts estimate Paul’s 50 call option contracts cover the purchase of 5,000 shares at a strike price of $120 per share, according to SFGATE. The current Nvidia stock price hovers around $800. If Paul exercised the options now, he could net over $1.6 million in profit after accounting for estimated premium fees around $1.75 million.
The Pelosis are no strangers to trading individual stocks, despite Nancy Pelosi’s role crafting policies affecting public companies. She has opposed bans on Congressional stock trading, though recently softened her stance amidst criticism. Lawmakers argue such trading presents conflicts of interest and opportunities for insider trading.
While legal, the trade illustrates how the wealthy can generate outsized returns. Experts note the high premiums required make such trades inaccessible for average investors. The potential windfall is over 7 times Pelosi’s annual Congressional salary.
“I would definitely make this trade,” UC Berkeley Professor Kevin Coldiron told SFGATE. However he added, “I don’t think that’s a trade that someone who’s got $10 million is doing.”