White House opposition complicates Senator Hawley’s proposed stock trading ban for lawmakers
by VT Markets
/
Jul 30, 2025
A Republican senator, Josh Hawley, is proposing a new law to stop lawmakers from trading stocks. The White House is against adding the president and vice president to the bill.
This proposed law, called the Preventing Elected Leaders from Owning Securities and Investments (PELOSI) Act, would prevent lawmakers from buying or holding individual stocks. Hawley’s plan to include the executive branch has faced pushback from the White House’s Office of Legislative Affairs.
Impact On Market Volatility
The White House’s opposition could add political uncertainty to the market. Conflicts like this, especially with the executive branch involved, often lead to instability in major market indices. Derivative traders should brace for increased market volatility in the coming weeks.
We are monitoring the CBOE Volatility Index (VIX), which is currently at a low level of about 14. Any signs of movement on this bill could cause a spike in the VIX, similar to the significant surge we observed during the legislative stalemate in early 2024. So, investing in VIX call options or VIX-related ETFs could be a smart way to protect against or profit from potential market swings.
Sector Specific Implications
This issue could also affect specific sectors, which options traders should keep a close eye on. Data from the first half of 2025 reveals that lawmakers have most of their investments in technology, defense, and healthcare. We’ll be on the lookout for unusual trading volumes in options for ETFs like XLK and IHF, as these could indicate insider activity before the committee vote.
The result of the vote on Wednesday will be crucial for our short-term strategy. If the bill fails, it may bring a brief relief for the current situation, reducing regulatory worries. However, if the bill moves forward despite opposition, we expect a negative impact on the sectors favored by politicians.
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by VT Markets
Jul 30, 2025
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