Congressional Trade Drift
In plain terms
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.
How it works
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.
Data dependencies
- Congress trades
A data feed this strategy reads, refreshed on its normal schedule.
Expected edge
- Reported return
- 12% Senate / 6% House abnormal returns historically; 3-8% post-disclosure-attention era
- Tested over
- 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
Companies that sharply increased lobbying spend QoQ outperform 6-12 months later — management is signaling private belief in regulatory tailwinds.
When several insiders buy their own stock within a short window (a 'cluster buy'), it's the most reliable insider signal. Sales are mostly noise.
Many insider trades are clockwork 10b5-1 plans with zero info. Filter them out using trade-date entropy; only opportunistic cluster buys predict +82 bps/month.
Explore Congressional Trade Drift on alphactor.ai
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