congressional trade drift
What it checks
When several different members of Congress disclose buying the same stock within a 90-day window, follow the cluster. When they're selling, fade it. Single trades are noise — clusters of two-plus distinct members carry the signal.
Mechanism
US Senate/House members are required to disclose personal trades within 45 days (Stock Act 2012). Ziobrowski 2004 JFQA (Senate), Eggers-Hainmueller 2013 AJPS (House), and Belmont 2024 working paper all document positive abnormal returns following disclosed buys, strongest in committee-chair members trading their oversight sectors. Naive Pelosi-tracker strategies show 3-8% ann. OOS alpha 2020-2024 even after public attention. Uses disclosure_date (not transaction_date) as the tradeable date — transaction_date would leak attention.
Signal rule
Rolling 90d cluster: (#Buys − #Sales) by distinct congress members; long cluster>=K + 60d uptrend, short cluster<=-K + 60d downtrend (K in {2,3,4}).Data dependencies
congress_tradesWorker data table — see services/worker schema.
Expected edge
- Paper alpha
- 12% Senate / 6% House abnormal returns historically; 3-8% post-disclosure-attention era
- Paper window
- 1993-2024
Ziobrowski 2004: 12% Senate abnormal annual returns 1993-1998; Eggers-Hainmueller 2013 House: 6%; Pelosi-tracker funds: 3-8% ann. 2020-2024 OOS.
Example tickers where this is likely to fire
Illustrative only — the signal fires based on the live data, not a fixed list.
Related families
lobbying shockMacroLobbying is a leading indicator of regulatory tailwinds the firm expects to win — pharma facing FDA, finance facing CFPB. Changes in quarterly lobbying spend predict 6-12 months ahead returns.
insider form4Insider-ActivityLakonishok-Lee 2001, Cohen-Malloy-Pomorski 2012: corroborated insider purchases (Form 4 transaction_code='P') from multiple insiders within a short window are the single most-predictive insider signal — ~6%/year alpha over 6-12 months. Single-insider buys are noisy; cluster buys (3+ distinct insiders, or a single buy > $1M from CEO/CFO) are not. Long for 60 days on cluster buys; long for 30 days on a single $1M+ transaction. Sales are deliberately ignored — they're confounded by liquidity, diversification, and options expiry.
insider routine decoderInsider-ActivityEach insider has a 'routine' footprint (monthly/quarterly 10b5-1 clockwork buys) vs 'opportunistic' trades. Filter OUT routine insiders — the remaining cluster buys predict 82bps/month. Routine alone is zero.
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