Market Commentary

Former Microsoft Exec Josh Gottheimer Makes Options Play on MSFT

Matthew Levy, CFA · 1 minute read

Josh Gottheimer, a Democrat from New Jersey’s 5th congressional district in the House of Representatives, recently made some headlines by announcing several option plays on Microsoft (MSFT:US) on January 4, 2023. To summarize his trades, he bought 3 sets and sold 3 sets of Call options

The three purchases were valued in large brackets, with two investments worth between $500,000 - $1,000,000 in call options at a strike price of $150 with an expiry date of June 16, 2023, and another worth between $250,000 - $500,000 in call options at strike price of $160 with an expiry of March 17, 2023. His trades are already in the money as the stock is currently trading at $258 as compared to the price of January 4: $229. 

At the same time, he loaded off more call options valued in the same price ranges. He sold $250,000 - $500,000 worth of options at a strike price of $165 and an expiry date of June 16, 2023. Also following were two trades of $500,000 - $1,000,000; one trade had a strike price of $155 and an expiry of July 21, 2023, and the other with a strike price of $155, expiry on September 25, 2023.

One reason for this simultaneous buying and selling could be to hedge the upside on MSFT by collecting some income from the sold calls to pay for the purchased calls. It’s hard to say whether he is in the money, given the nature of options and their price based on time volatility as well, but given the higher move, he is likely to have made some money on these trades overall. 

Microsoft, of course, has been in the news a lot lately with its investment in OpenAI - the Chat GPT firm - as well as a significant sell trade of $1M-$5M from Kevin Hern, Republican, on what happened to be the same day: January 4.

Josh Gottheimer first took office in 2017, and prior to his political career, Gottheimer worked in the private sector as a speechwriter for former President Bill Clinton and as an executive at Microsoft. In Congress, he has been known for his centrist views and efforts to work across the aisle to find bipartisan solutions. Gottheimer has also been active in advocating for issues such as infrastructure investment, gun control, and election security.