A Wall Street trader made $7.5 million on an investment at a questionable time before giving in to a surprise debt limit deal

Biden and Kevin McCarthy

US President Joe Biden and Speaker of the House Kevin McCarthy (R-CA)Drew Angerer/Getty Images

  • A debt ceiling deal surprisingly gave the Mountain Valley Pipeline the green light.

  • One trader bought 100,000 call options from a pipeline owner a few days before that was announced.

  • The mystery trader’s identity remains unknown and some have suggested that it is a concern about insider trading.

As part of the debt ceiling agreement, an unexpected concession was included in the bill: approved the Mountain Valley Pipeline, a 304-mile natural gas connection from northwest West Virginia to southern Virginia.

An interesting project by West Virginia Senator Joe Manchin has been bogged down in Congress, legislation forcing action on permits will propel the project forward.

However, there is no public reason to believe that the pipeline was at all part of the deal, which makes the actions of a mysterious trader — who killed people upon inclusion — somewhat suspicious. According to analysis of trading data by Bloomberg.

Equitrans Midstream Corporation shares fell 35% last year. On May 24, a few days before the deal was signed, a mysterious trader bought 100,000 call options — essentially a bet on the stock price appreciation — on Equitrans Midstream. Then, on May 27, the debt deal covering the Mountain Valley Pipeline was struck.

Following that announcement, shares of Equitrans Midstream jumped 49%.

From the looks of it, the bet made the trader $7.5 million last Friday, according to Bloomberg. Options are still backlog, so that number could grow in the event that Equitrans Midstream continues to recover.

That kind of perfect timing is, needless to say, very confusing. The Valley of the Mountain deal is kept secret until the debt deal is announced. Some are so suspicious that they want to investigate potential insider trading.

Equitrans said neither it nor any executives were involved in the transactions. Manchin himself says he knows nothing about options trading. The negotiations took place very close to the match between House Speaker Kevin McCarthy and the White House. According to Bloomberg, ethics watchdogs want answers.

Members of Congress are prohibited from trading on confidential information, though an internal investigation in 2021 detected multiple violations of the STOCK Act among members.

Read the original post on Business Insider


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