Washington Insider Trading: How Officials Profit from Announcements

Name: How Much Has Political Insider Trading Cost You?
Uploaded: 2026-03-30T00:59:25.086323+00:00
Duration: 14 min 4 s
Channel: How Money Works
Description: Summary and key takeaways on How Much Has Political Insider Trading Cost You? — Summary, covering Political Insider Trading The use of non‑public government

How Money Works

Mar 30, 2026

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14 min video

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2 min read

YouTube video ID: qWONlYziwmc

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The use of non‑public government information for personal financial gain has become a systemic feature of Washington. Officials repeatedly exploit privileged insights to time trades that move markets, creating a cycle where policy decisions are influenced by private profit motives.

The Recent Speculation Incident

A presidential announcement about de‑escalation talks with Iran was followed by a futures spike just 16 minutes later. The trade, executed within 60 seconds and involving hundreds of millions of dollars in notional value, may have earned a mystery speculator roughly $60 million in only 20 minutes.

The Pattern of Market‑Moving Announcements

Good news is typically released on Monday mornings before markets open, allowing insiders to capture immediate price gains. Conversely, bad news is often buried on Friday afternoons after markets close, minimizing its impact on trading. Recent examples include tariff announcements affecting the EU, Mexico, and China, as well as military operations involving Iran and Venezuela.

Drivers of Increased Insider Trading

Modern “bet on everything” markets and cryptocurrencies make it easier to profit from privileged knowledge while complicating detection. Government spending now represents a larger share of GDP than at the height of World War II, tying financial performance more closely to policy decisions such as stimulus measures and Federal Reserve actions.

Data Analysis of Congressional Trading

Most members of Congress maintain “buy and hold” portfolios, but a small group of active traders drives outperformance. In 2025, Congress as a whole beat the S&P 500 by over 20 percent. Lawmakers in leadership roles or on specific committees—such as Agriculture—outperform peers by an average of 47 percentage points, according to a National Bureau of Economic Research study. The official disclosure system is intentionally cumbersome, resembling 1990s‑era technology.

Economic Impact

Congressional trading volume is estimated at roughly $1 billion annually. The primary cost is the distortion of policy‑making to favor personal financial interests. Economic uncertainty, now at its highest level outside the pandemic, forces higher interest rates on U.S. debt. The resulting debt‑risk premium doubles interest repayments over time, ultimately funded by taxpayers through inflation, higher taxes, or potential default.

Mechanisms Behind the Advantage

Officials employ a market‑timing strategy: they release positive news when markets are open to maximize immediate gains and conceal negative news on Friday afternoons to limit market impact. Committee assignments provide a further edge; members of committees overseeing sectors such as agriculture or technology receive non‑public information that directly correlates with sector performance, enabling high‑conviction, high‑profit trades. The heightened economic uncertainty also raises the debt risk premium, forcing the United States to offer higher interest rates to lenders.

Takeaways

A presidential announcement about Iran de‑escalation was followed by a futures spike 16 minutes later, suggesting a mystery trader may have earned about $60 million in just 20 minutes.
Good news is typically released Monday mornings before markets open, while bad news is hidden on Friday afternoons after markets close.
Bet‑on‑everything markets, cryptocurrencies, and the growing share of government spending in GDP make it easier for officials to exploit privileged information and harder for regulators to track trades.
Most Congress members hold passive portfolios, but a small group of active traders—especially leaders and committee members—outperform the S&P 500 by over 20 percent, with leaders beating peers by 47 percentage points.
Congressional trading, estimated at roughly $1 billion a year, distorts policy decisions, raises economic uncertainty, and contributes to higher U.S. debt interest costs that ultimately fall on taxpayers.

Frequently Asked Questions

How do committee assignments give lawmakers a trading advantage?

Committee members receive non‑public information about sector‑specific legislation, allowing them to place high‑conviction trades that align with upcoming policy impacts, which research shows leads to significant outperformance. For example, Agriculture Committee members have traded corn futures ahead of policy changes, and leaders overseeing the Chips Act have profited from Nvidia stock moves.

Why are good news announcements typically made on Monday mornings while bad news is buried on Friday afternoons?

The timing aligns with market liquidity; releasing positive news when markets are open maximizes immediate price gains for insiders, whereas postponing negative news until after Friday close limits its impact on trading and protects personal positions.

Who is How Money Works on YouTube?

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Helpful resources related to this video

If you want to practice or explore the concepts discussed in the video, these commonly used tools may help.

Books On Financial Market Insider Trading Recommended

Provides historical and academic context on how insider trading functions, helping the reader understand the mechanics behind the congressional trading patterns discussed.

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Personal Finance Book For Stock Investing

Offers a baseline for standard, ethical investment strategies to contrast against the abnormal, high-performance trading patterns of political insiders.

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Books On Government Policy And Economics

Explains the intersection of government spending, debt, and market stability, which are central to the economic impact analysis in the video.

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Full Transcript YouTube

Earlier this week, the president announced on True 
Social that there had been productive talks with  
Iran to deescalate the situation in the region, 
which inferred a loosening of shipping traffic  
in the street of Hermuz, which in turn meant the 
potential for lower oil prices and a more positive  
outlook on financial markets. Now, putting to the 
side for a second that these productive talks may  
or may not have happened at all. What actually 
got people's attention was that just 16 minutes  
before this announcement, there was a huge 
spike in futures trading within these markets.  
clearly suggesting that someone on the inside knew 
what was about to happen and was profiting off it.  
Depending on the details of the trades, this 
mystery speculator could have made as much as  
$60 million within the span of 20 minutes. But 
perhaps this isn't surprising to you anymore.  
Insider trading has effectively become the 
expectation in Washington at this point as  
everyone from senior elected officials all the 
way down to junior public servants consistently  
outperform the top hedge funds on the planet. It's 
not great, but well, people have just become numb  
to it. These days, it's barely worth reporting 
on. It's obviously immoral at best and borderline  
treasonous at worst. But at this point, we 
know nothing is going to be done about it.  
And with everything else going on, it is easy 
to assume that in the grand scheme of things,  
this isn't actually hurting us individually as 
much as everything else in the economy at the  
moment. Most people don't really have stock 
investments worth worrying about. And even if  
they did, it's hard to see the impact this kind 
of cheating actually has. This disheartening  
indifference is part of what makes this week's 
lucky trade in particular so interesting. People  
actually cared about it. And there were probably 
two reasons for this. First, it was happening in  
a market that was clearly hurting them right 
now. Someone making life-changing amounts of  
money speculating on oil prices just inherently 
doesn't sit right while most people are struggling  
to put gas in their cars. The second was simply 
how brazen it was. The only reason we even know  
this happened at all was because whoever 
they are, they made trades with hundreds  
of millions of dollars in notional value within 
the span of just 60 seconds. And they did it 15  
minutes before the market altering announcement. 
The point is that if this was insider trading,  
they didn't even have the common decency to spread 
their trades out over a few hours. If they did,  
there is a good chance we would never even know. 
Instead, they are literally giving us the bird  
with trading volume. Now, this particular example 
may be infuriating, but if there is some good that  
may come of it, it is showing that this happens 
all the time. The insiders are usually just a  
little bit better at hiding it. Looking back 
at a few of the key changes that have enabled  
what should be shameful behavior to become so 
blatant is the first step, but this itself also  
raises some much more important questions like, 
well, how much money has actually been made off  
political insider trading? And more importantly, 
how much is all of this actually costing you? Now,  
should members of Congress be allowed to trade 
stock? Well, a bipartisan group of lawmakers says  
no to ban members of Congress from trading stocks. 
We heard from Representative Tim Burchett of  
Tennessee before the first hearing on this in the 
House in more than 3 years. spike in oil prices  
overnight really suggests that markets believe 
this conflict could last longer than initially in  
expected and there are plenty of reasons for that 
over the weekend in terms of escalatory rhetoric  
by the US and we uh still have this restriction 
on the movement of oil and gas. So if you pay  
attention to a lot of market moving announcements 
you will notice that a lot of them follow a  
similar pattern and once you see it it becomes 
pretty hard to ignore. On Friday, the 23rd of May,  
the White House announced 50% tariffs on EU goods, 
sending panic into the markets that had already  
closed for the night. Then on the 25th of May, the 
tariffs were delayed and the language softened,  
resulting in a massive rebound. The indefinite 
suspension of Mexico tariffs were announced on a  
Monday morning, while a new 100% tariff on Chinese 
goods were announced on a Friday night. Strikes on  
Iran started late on Friday here in America and 
the military operation in Venezuela was either  
late on a Friday night or early on a Saturday 
morning depending on what side of the country you  
were on. Then of course the market rally this week 
was driven by the announcements about deescalating  
the uh ongoing situation that was first started 
on a Friday. All of these are also just examples  
from the last 12 months. The blindingly obvious 
pattern is that good news announcements will be  
made on Monday morning, right before markets open, 
and bad news will be buried at the end of the  
week after markets have already closed. Now, this 
isn't actually anything new or even that partisan  
either. Before the 24-hour news cycle, it was 
simply considered good politicking to dump bad  
news on a Friday afternoon after newsrooms had 
submitted their prints and leaving enough time  
that it would be old news on a Monday morning. 
But today, as the market has become a live updated  
indication of national competence, for some 
reason, these incentives have clearly shifted in  
ways that are directly profitable. Every single 
one of the major announcements listed in this  
video so far came with suspicious corresponding 
trades. And this has only become easier for two  
reasons. The first is that bet on everything 
markets utilizing cryptocurrencies have made  
it easier to well bet on everything. In the past, 
if you had privileged knowledge about most events,  
it was difficult to actually turn that into a 
profit on financial markets. These platforms have  
also made these bets harder to track for those 
people who are important enough to be entrusted  
with some insider knowledge, but are not yet 
important enough to be above the law. The second  
reason is that Washington is simply creating more 
market moving noise than it ever had before. Just  
from a financial perspective, government spending 
now represents a higher share of GDP in a given  
year than it did at the height of the Second World 
War. Even beyond that, while we may have become  
desensitized, massive stimulus measures, global 
trade altering tweets, and Fed policy meetings  
getting hundreds of thousands of live viewers is 
really not normal. And more so than ever before,  
financial performance is very closely tied to 
government decisions. A study published by the  
International Review of Economics and Finance 
found that financial instability was marketkedly  
higher when Congress was in session. And it also 
found that this was when they did a vast majority  
of their trading, which was a surprise to well, 
absolutely nobody. And well, yeah. The third  
reason is probably exactly what you already were 
thinking, which is that even for the individuals  
who have been identified as clearly abusing their 
positions for personal profit, the punishments  
have been very light. both from a legal 
perspective and in terms of how much it affects  
their chances of re-election. Again, people have 
become so numb to this that for a lot of outlets,  
it's barely worth reporting on. In fact, I will 
admit that I almost fell into the same trap. When  
this market activity started gaining attention, I 
almost brushed it off as simply being business as  
usual. But then something changed. People actually 
gave a [ __ ] The attention this particularly  
egregious insider trade is getting is a great 
excuse to shine a spotlight on the wider problem  
to show just how much these games are making 
for the people that play them and to work out  
how much this is all costing you. So, it's time 
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so one of the reasons why people may be so 
ambivalent about things like congressional  
stock trading is because it doesn't clearly 
impact them. A vast majority of shares and other  
financial assets in our economy are already 
owned by already very wealthy households,  
large institutions, or foreign investors. The 
kind of front-running insider trading that has  
allowed Congress to effectively double the return 
of the stock market might be a zero- sum game,  
but the indirect losses the market bears to fund 
their gains are spread out over a lot of people  
who probably won't feel it in the grand scheme of 
things. Now, this is not to excuse this behavior,  
but instead it is to show why it's become so 
easy to ignore, but just tracking the data,  
or at least the data we are actually allowed to 
see by going back through Stock Act disclosures  
can give us some really interesting insights. 
The first and perhaps most important point in  
this data is that active traders in Congress, as 
in people who are frequently buying and selling  
assets or using complex financial instruments 
like derivatives, are in the minority. At least  
from the official disclosures, most house reps and 
senators largely have buy and hold portfolios with  
the occasional trade here and there that wouldn't 
really be considered outside the ordinary for most  
relatively wealthy career professionals. Now, 
that might sound like I'm devil's advocating  
a bit here, but it's actually the opposite. 
It instead shows that the outperformance in  
congressional stock trades are largely driven by a 
small group of extremely active traders. In fact,  
most of these elected officials actually did 
worse than the market as a whole. According  
to the data that has been disclosed from 2025, 
just under a third of congressional portfolios  
outperformed the S&P 500, but that was the same 
year where Congress as a whole was up over 20%  
above the already strong returns of the broad 
market. In plain English, what this means is that  
there are a few dozen elected officials who are 
making absolute bank and pulling up the average  
considerably. Congress as a whole on average is 
now making over 10,000 trades a year, largely  
concentrated amongst just a handful of people. The 
median number of trades made by a congressperson  
was just three, raising the question of how these 
other people have time to do anything else. Now,  
I know this goes against the narrative that all 
of them are in on it, but that's actually a good  
thing. It shows that people who are clearly gaming 
the system are a minority and that we can actually  
hold these officials to a higher standard. But 
before you get too optimistic, remember this  
is still a how money works video. So the second 
thing we found when we compiled this data is who  
those Congress members making all of this money 
actually were. The reality is that it was largely  
more senior Congress people who were sitting on 
lots of committees. And almost every year since  
these disclosures were introduced, the party that 
has controlled the House outperformed the party  
that was in the minority on their stock trades. 
These special committees give them access to even  
more information than they would get as regular 
lawmakers, letting people like Nancy Pelosi trade  
in Nvidia while shaping the chips act or Tommy 
Tuberville dabbling corn futures while serving  
on the Agricultural Committee. Now, mercifully, 
much smarter people than me at the National Bureau  
of Economic Research actually found the same trend 
to corroborate these findings. The study revealed  
that lawmakers generally perform similar to their 
peers until they are put into a leadership role,  
at which point they outperform their peers by 47 
percentage points on average, which in the world  
of investing is an unfathomably large gap. In 
2025, these insiders again considerably outperform  
the market and their peers in Congress. The only 
people from this group to actually lose money were  
Chip Roy, who got absolutely hammered on a single 
energy stock and has since become a major advocate  
of limiting congressional stock trading, and Mitch 
McConnell, who reported a net trading loss of 1.8%  
in the year. And that is probably the closest I 
will ever get to defending Mitch McConnell. Oh,  
yeah. And the third thing we found out when 
pouring through this data is that even though  
it is technically publicly available, they have 
made it about as difficult as humanly possible  
to find. The user interface that you need to use 
in order to find disclosures looks like it was  
straight out of the 1990s and the information is 
presented very unintuitively. Throw on some low  
poly gifs and you can almost hear the dialup tone. 
Again, for a law passed in 2012. Now, thankfully,  
if you don't feel like subjecting yourself to 
this, you can also find a lot of this information  
on third party websites that track this data 
as well. So, I will leave a link to that below.  
Unfortunately, the reason that there are so many 
third party tools that track this data so closely  
is because, well, people just try to make money 
by copying the trades of their elected officials,  
which is not great, but at least it gives us some 
user-friendly transparency. Finally, of course,  
the Stock Act only applied to members of Congress 
and their staff. It doesn't include the president,  
cabinet members, or other highranking officials, 
and it certainly doesn't include the off-the-book  
transactions like the one that inspired this 
video in the first place. But even still,  
from what we know, how much is all of this 
actually costing us? Well, collectively, from what  
has been legally disclosed, Congress specifically 
only does about a billion dollars worth of trading  
volume in a single year, which is clearly an 
insane amount of money for a totally random  
representative cross-section of our country. But 
it's also not enough to meaningfully move markets  
by itself. The real cost, of course, is how these 
financial incentives alter their decision-making.  
Is someone on the agricultural committee going to 
propose policy that helps farmers but hurts their  
corn futures? Will someone who owns millions 
of dollars worth of Nvidia bail out the AI  
industry? And is it worth undermining trust in our 
geopolitical channels to make a few million on oil  
futures? These decisions impact how much we pay in 
interest, the validity of our trade deals, and the  
strength of our currency. Our economic uncertainty 
index is now higher than it has been at any point  
outside of the pandemic, which just on our debt 
alone means we need to offer higher interest rates  
to offset the increased risk that now comes with 
lending to America. This has more than doubled  
our interest repayments over the past 5 years 
alone. Something that we are all eventually going  
to pay through higher taxes, higher inflation, or 
just good old-fashioned economic default. Again,  
this is also just one avenue where this political 
self-s serving is coming back to bite us. Is  
insider trading exclusively responsible for our 
debt risk premium? Of course not. But it does  
mean that there are direct financial incentives 
not to fix it. But if you want to know how much  
worse this particular problem can get, go watch 
this video next to find out why we haven't had a  
debt crisis yet. And don't forget to like and 
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