Zinger Key Points
- A U.S. Senator is betting against the stock market with a position in a short ETF.
- This Senator has used this strategy multiple times over the last two years and profited.
The debate about whether members of the U.S. Congress should be allowed to buy and sell stocks often gains steam when questionable trades are made and shared publicly.
A leading member of Congress continued his trend of recent years betting against the stock market performance.
What Happened: No stranger to betting against the performance of the stock market, Sen. Thomas Carper (D-Del.) cashed out from one of his bearish positions and entered a new one.
"Senator Carper is short the market through an ETTF called $HDGE and therefore short America," a tweet from @congresstrading said.
The filing shared showed Carper sold his positions held in the ProShares Short QQQ ETF PSQ on Oct. 20. The transaction totaled sales of $3,000 to $45,000 according to the filing.
Along with the sale, Carper also disclosed purchasing up to $45,000 in AdvisorShares Ranger Equity Bear ETF HDGE.
According to Unusual Whales, Carper shorted the stock market four other times with a profit each time. The recent sale of ProShares Short QQQ came with around a 6% profit according to a tweet.
The transaction followed similar trades by Carper in both HDGE and PSH previously. In November 2022, Benzinga shared Carper had bought up to $110,000 in the AdvisorShares Ranger Equity Bear ETF.
The Ranger Equity Bear ETF was launched in 2011 by Advisor Shares.
"The investment objective of the AdvisorShares Ranger Equity Bear ETF is capital appreciation through short sales of domestically traded equity securities," the company's website said.
AdvisorShares said the ETF could be used as a tool in a long/short strategy in which investors go long on an index ETF and go long HDGE, giving them short exposure as well.
Related Link: 10 Best Stock Traders In Congress In 2022
Why It's Important: Carper sits on the Senate Finance Committee, drawing a potential warning for investors that the stock market could trade down in the coming months given Carper's large bet.
Carper has served in the U.S. Senate since 2001 but announced earlier this year that he will not be seeking re-election in the 2024 election.
Members of Congress are allowed to buy and sell stocks, including taking short positions, as long as they properly disclose.
A push to ban members of Congress from buying and selling stocks, options and ETFs had risen in recent years. Over the past two years, members of Congress have been buying and selling stocks linked to committees they serve on or based on new policies or contracts announced by the U.S. government, which raised concerns that there was insider trading activity happening.
As a member of the Senate Finance Committee, Carper could be privy to information on what the U.S. government planned to do to fight high inflation.
Read Next: Want To Copy Master Trader Nancy Pelosi's Investments? There's An ETF For That
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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