Pelosi's Option Bet Paying Off Big as Palo Alto Networks Shares Near Record High

According to a post by Unusual Whales on X.com, Nancy Pelosi's investment in deep in-the-money call options has yielded a remarkable gain of over 100%, translating to approximately $1.5 million, following the post-earnings surge from Palo Alto Networks.

Starting from what seemed like a huge mistake, Pelosi bought 50 call options for PANW with a $200 strike price and an expiration date of January 17, 2025, on February 12, just before the massive slump, dropping 28.44% in a single session on February 20—the worst performance since its IPO in 2012. This initial trade was disclosed on February 23 alongside her subsequent purchase on February 21, where she acquired up to $250,000 worth of PANW call options at $261.97 per share. This second purchase was made at the perfect bottom.

Nevertheless, Pelosi's decision to invest in the cybersecurity firm has paid off handsomely. Since her purchase, PANW shares have surged over 40%, recently surpassing the $366 mark. This rally was fueled by Palo Alto Networks' robust fourth-quarter performance, where it reported a double beat on revenue and earnings per share, and introduced fiscal year 2025 guidance that exceeded analysts' expectations.

As the stock options purchased back in February near their expiration date, the time value decay is expected to accelerate significantly. When the expiration date falls within the 100 to 120-day range, the option value is likely to decrease exponentially. Pelosi has several strategic choices: she can exercise the options to buy the underlying stock, roll over the options to a later expiration date, or sell the options to lock in her profits. Each of these actions will have a notable impact on the open interest of the option contract. Investors are keenly observing her next move.

The remarkable timing of Pelosi's second PANW trade has led some to speculate whether it was a result of skill, luck, or perhaps foreknowledge of rising cybersecurity threats that could drive demand for security solutions. Regardless, her decision to double down on Palo Alto Networks has underscored her investment prowess, leaving investors watching her moves with keen interest.