The American graphics processing company Nvidia, often associated with the topic of Bitcoin and crypto mining due to the inappropriate use by retail customers of the video cards it produces, has again made headlines in recent days.
Speaker and member of the United States House of Representatives Nancy Pelosi completed a purchase of call options worth $5 million on the technology company’s shares, anticipating possible rebounds over the coming year.
Her record purchase sparked a heated debate over politicians’ conflict of interest in their business activities: Pelosi had negotiated Nvidia in 2022 while pushing for a semiconductor bill known as the CHIPS ACT which would have greatly benefited the graphics card company on the stock market. walk.
After a year of stopping Nvidia trading, Pelosi is now back in the game, ready to take the next price increase while facing accusations from her political detractors.
Let’s see all the details below.
Nancy Pelosi Buys $5 Million Nvidia Call Options, Sparks Debate Over Free Trade Concept
Nancy Pelosifirst American woman to serve as Speaker of the United States House of Representatives, recently purchased $5 million worth of call options on Nvidia, a technology company known by many for its involvement in Bitcoin and crypto mining activities.
A purchase option is a tool belonging to the derivatives market in which the buyer reserves the right, but not the obligation, to buy a stock in the future at a fixed price, paying a premium to “ensure” this privilege.
This allows you to trade a stock while limiting losses to a fixed value (the premium price) and at the same time profiting from potential market increases. All options have a predetermined expiration date.
Now, leaving aside the technical details and the advantages offered by this financial instrument, it is interesting to note how the news of the acquisition of Nvidia by the American politician sparked a wide debate on the fairness and transparency of the concept of free trade.
Although there is no law in the United States prohibiting House members from trading stocks and other products, Pelosi has drawn the ire of her critics in the past over an alleged conflict of interest between certain legislative proposals that it has put forward and its speculative strategy.
In 2022, as Nvidia stock outperformed the Bitcoin and crypto mining market, Pelosi was discovered to have invested millions of dollars in the tech company as she was about to pass legislation known as the CHIPS ACT in Parliament.
His calls came days before the passage of the law favoring the production and sale of semiconductors in the country, giving Nvidia and other similar companies an incredible commercial advantage.
Faced with all this, his political opponents were outraged and called on the government to oppose this blatant conflict of interest.
Even more, growing demands to ban members of Congress and their spouses from trading have focused on Pelosi with a bill that uses her name as an acronym: the PELOSI Act.
In her response, Nancy Pelosi sold all her open positions just as the debates intensified: It is also worth noting that the closing of trades occurred almost instantly in response to protests from other politicians, despite the fact that the conclusion of a trade on the options market can take up to two weeks .
Now, after calming the waters for about a year, losing $8 million in potential profits, the female House member is getting back in the game by buying with her husband. 50 call options, worth a total of $5 million, with a strike price of $120 and expiration in December 2024.
The purchase could be linked to secret information known to the couple, which could push the stock price higher in the coming months.
It will be very interesting to see how Republicans will react to a new hypothetical case of contradictory insider trading with the interests of the House, and whether any action will be taken against Pelosi.
As reported by Congresstrading, which revealed the details of the operation on December 22:
“Pelosi bet millions on $NVDA in November using call options. Using a deceptive tactic, she deliberately revealed it on the Friday before Christmas to avoid media coverage.
Nvidia: the title associated with Bitcoin and crypto mining is preparing for a new ATH
US politician’s large purchase of call options on Nvidia highlights the stock’s bullish outlook, often associated (sometimes wrongly) with the theme of Bitcoin and crypto mining.
Graphics cards produced by the Santa Clara company have been widely used in the past by the general public to participate in Ethereum mining via GPU, while this practice has now been abandoned due to the protocol transition from PoW to PoS.
Since the start of the year, Nvidia shares have not felt the absence of miners and have taken off on the market, marking an increase of +243%.
In particular, Nvidia became one of the newest members of the $1 trillion market cap club last year, attracting increasing attention thanks to the company’s role in the growth of artificial intelligence.
However, over the past 5 years, the stock has increased by 1,448%, becoming one of the winning horses in the US stock market with MicrosoftApple, Alphabet and Tesla.
Currently, the stock is trading at a pre-market price on Nasdaq of $493.49, very close to the previous all-time high of $505.48 in November.
Given the increasing enthusiasm of speculative markets, and taking into account the forecasts of an increase in monetary stimulus from the FED in 2024 with a drop in interest ratesit is very likely that the stock will reach a new ATH in the coming months.
If it breaks the psychological threshold of $500 with a weekly close above that figure, we could likely usher in a new uptrend for Nvidia.
On the contrary, the hopes of the bears only come to fruition with a downside breakout of $400, which represents a 19% discount from today.