GOP Rep. on cyber committee dumped MSFT shortly before $10B contract scrapped
I'm all for the pitch forking when it makes sense, but the congressman has a decent out which wouldn't be hard to prove.<p>> In the audio recording, Fallon backed this up by outlining the trade as an option call in which he purchased a block of $250,000 in Microsoft shares on May 26, and subsequently sold the rights to other investors to purchase at a later date. Those other investors chose to purchase the shares on June 21, according to disclosure reports, effectively liquidating Fallon's position in the company just two weeks before the high-profile JEDI contract fell through.<p>He purchased a bunch of stock, or ITM (in the money) options - either way he then sold covered call options (good safe bet). Those sold call options went ITM and someone exercised forcing his position to be liquidated.<p>Purchase a stock, sell call options to make a bit more money or as a "hedge" against the stock going down.<p>Either way, classic strategy.<p>It didn't really work this time because the stock went up too far, out of his expectation which limits the gains to the value of the options sold. But again, it's a relatively safe strategy.