Sen. Carper Is Reaping Profits From His Short S&P 500 Trade

Senator Thomas Carper disclosed his September trading activity yesterday, with all trades listed as ‘sell’ transactions.

The filing showed that on September 19 he sold ProShares Short S&P 500 (SH: US) when the stock price closed at $15.90. He previously invested in ProShares in March this year when he made 4 separate trades to gain exposure to this index that measures large-cap U.S. stock market performance. 

SH is a popular investment vehicle that allows investors to bet on a drop in the value of the S&P 500. By using leveraged investments, like short sales and futures contracts, SH moves in the opposite direction of the S&P 500. It is considered to be a highly speculative, aggressive way of gaining exposure to selling the S&P 500. 

Senator Carper bought ProShares Short S&P 500 ETF in March this year via three trades whose values ranged from $1,000 to $15,000 in size. There was an additional trade that was valued between $15,000 and $50,000. Around six months later, the Senator exited this investment to profit from the falling S&P 500 index.

In one instance, the index was trading around 4200 in March when Carper was buying SH ETF. On the other hand, his closing price in SH corresponds to the S&P 500 trading below 3900.

In addition to essentially closing S&P 500 shorts, Senator Carper also disclosed trades of European banks Barclays (BCS: US) and Sociedad Química y Minera (SQM: US), a Chilean chemical company and a supplier of plant nutrients, Iodine, lithium, and industrial chemicals.

The SQM trade proved profitable for Senator Carper as he bought shares in August when the stock price closed at $94.02 before selling around 3 weeks later when shares closed at $111.27.