Sen. Loeffler, CEO husband reportedly made options trades often used as hedges against volatility

US Senator Kelly Loeffler (L), R-GA, and husband Jeffrey Sprecher, CEO of Intercontinental Exchange and Chairman of the New York Stock Exchange, on January 6, 2019.

Mandel Ngan | AFP | Getty Images

Sen. Kelly Loeffler of Georgia and her husband, the CEO of the company that owns the New York Stock Exchange, reportedly made an options trade in February that is typically a bet on future volatility.

The two sold an undisclosed amount of “put” options on companies including Kellogg, Alibaba, Chevron and BP, according to Bloomberg News. The trades generate income via the premium collected in the put sales. They also obligate the seller to buy the stocks back if the shares decline to a certain predetermined price.

Investors will often use this strategy as a hedge if they expect certain stocks to face some turbulence. It has the effect of generating some immediate income, while obligating them to buy stocks they want to own for the long term at cheaper prices. The pair’s motivation behind the trade was not known and it is possible the sophisticated options strategy was being deployed for another reason.

Spokesmen for the Georgia Republican and for the Intercontinental Exchange — where Loeffler’s husband, Jeff Sprecher, is chairman and CEO — did not respond to requests for comment.

The couple also reportedly sold $46,027 worth of stock in online travel company Booking Holdings in the day leading up to President Donald Trump’s ban on most European travel to the United States. Booking, which helps customers book flights, hotels and other travel-related necessities, is down 40% this year.

The couple came under fire last month after it was revealed that they had sold up to $3 million worth of equity after the senator was privately briefed by federal officials about the spread and impact of the novel coronavirus.

Loeffler told CNBC in March that she and her husband didn’t have special information about those firms and that she had “no discretion over … our portfolio” which she said is managed by third parties.

She also said the couple’s trades earlier in the year were a mix of buys and sells and that some of the trades were “quite bullish.”

Intercontinental Exchange, which owns other exchanges and clearing houses, said in a statement in March that the nearly 30 transactions involving the couple were “in compliance” with company policies.

Of Feb. 26, the couple sold $3.5 million worth of Intercontinental Exchange shares at an average price of $93.42 each. 

They also sold $15.3 million of ICE shares on March 11, when the stock traded around $87. The stock is now trading at $81 a share. The stock is down more than 14% in the last month.

Click here to read the original Bloomberg News report.

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