Why CEOs Are Dumping Stock

The CEO of Microsoft just sold $285 million worth of MSFT stock.

Elon Musk has dumped $10 billion in TSLA.

This year alone, Jeff Bezos has quietly unloaded $10 billion in Amazon.

We’re looking at record-breaking company-insider sales numbers in the mega-caps this year. Between TSLA and AMZN alone, I’m talking about a whopping $69 billion.

And with the Nasdaq down more than 2% today, shedding close to 350 points, investors are wondering… should we panic?

These tech names were supposed to be “too big to fail.” So, why are CEOs offloading their stock?

Well, there are two reasons:

  1. Valuation

The market has appeared strong this year. But really, the mega-caps – that’s MSFT, TSLA, AMZN – have been holding up the rally.

They’re just paint on an ugly house. And some of this paint is bound to start chipping. These CEOs know that – that’s why they’re taking their money now. And you wouldn’t be wrong to do the same.

The second reason doesn’t affect you and me quite as much – and that’s taxes.

  1. Taxes

The administration is on billionaire CEOs to pay their “fair share” of taxes. And shockingly, the aforementioned billionaires don’t like it:

Source: Twitter.com

We don’t know where these tax laws are going to go. And neither do CEOs like Musk, Bezos, and Nadella. That’s why they are taking their cash now – to get ahead of it.

The VIX Just Broke 30 – Again

The VIX has broken 30 for the second time this week.

The Nasdaq is getting smoked, and volatility is catapulting higher in response. But while other investors panic, traders like us should be licking our chops.

With the VIX above 30, there’s a ton of room for opportunity.

This is where options are our best friend. With calls and puts on index ETFs like SPY, QQQ, DIA, and UVXY, we can trade our way to profits on every up and downswing.

That’s exactly what I’m doing all week, in fact, in the Profit Revolution trading room.

Monday through Friday at 2PM ET, you can get all my top volatility trades… live.

Click here to join before next week’s money flow.

And then, check out the paper flow in VIX yesterday – because it looks contrary to what we’re seeing today.

100,000 of the December 2022 VIX puts were bought yesterday. That means we’ve got a ton of cash betting on volatility going down, not up this month.

The VIX December options expire on Wednesday morning, December 22. We’ve got a trading day on the 23rd, the market is closed on the 24th, and the next week is shortened for New Years.

What does this mean for the future of volatility?

Well, that’s what I’m going to explore today.

In general, there’s plenty of room for the VIX to make another run at 30. I mean, look at it today – it already has.

But because of the upcoming holidays, there is some potential here for the market to calm down.

Money is exiting the mega-caps, but it’s flowing into the Dow Jones and the Russell.

The VIX could get below 20 between now and the December 22 expiration. And when that happens, these puts will pay out really well.

Let’s Talk Nonfarm Payrolls

I know, I know – it sounds boring.

A measure of the number of workers in the U.S. excluding farm workers, government workers, non-profit employees…

Blah, blah, blah.

But this data is important – or, more specifically, its effect on the market is important.

And it’s definitely not boring when you break it down looking like this:

Garrett and I broke down November’s nonfarm payrolls during this morning’s Money Morning LIVE.

This is the best place to get real-time trading info. I mean, we talked about the results immediately after they dropped, before the market even opened.

Click here to sign up to receive all Money Morning LIVE emails so you don’t miss a moment of the live action!

*clicking this link will opt you into the Money Morning LIVE eLetter.

In October, nonfarm payrolls increased by 546,000. Analysts were expecting 573,000 this month. But November only saw a 210,000 increase.

At the same time, the unemployment rate fell 4.2%, which was more than analyst expectations.

So we’re looking at a mixed bag of results here, and it’s hard to say whether the market will take this positively or negatively.

4,600 is the ceiling for the S&P. If we break this level, then we could see a real pop in the market heading into the weekend.

Until Monday…

Mark Sebastian
Founder, Profit Takeover


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