Written by:Boaz Sobrado

Translated by: Yangz, Techub News

Despite Nancy Pelosi announcing her retirement after this congressional term, she continues to publicly disclose her financial records. This Monday's financial documents revealed that she executed stock trades worth $37 million. Within hours, thousands of retail investors closely monitored her every move through mobile apps, the X platform, and other channels.

The 85-year-old former Speaker of the House is known for her political career, but through her financial disclosures, she has also become one of the most watched traders in the U.S. Her husband's investment returns far exceed the market average—latest disclosure documents show he sold $22 million worth of stocks in Apple, Amazon, Nvidia, and Disney, while simultaneously purchasing call options on the same tech giants he just sold. This document ignited financial social platforms within minutes, with retail analysts meticulously dissecting it for market signals.

Although Speaker Pelosi's spokesperson has clearly stated, "Speaker Pelosi does not hold any stocks, is unaware of any trades, and has not participated in any subsequent operations," this has not stopped the expansion of an ecosystem claiming to track her disclosed trades through insider trading applications. InsiderWave, which analyzes Pelosi's trades, has surpassed 25,000 downloads since its launch last October. Meanwhile, Polysights, which monitors suspicious trading patterns on the prediction market Polymarket, attracted 30,000 users in less than a year. Both provide the same service: allowing users to track the movements of "smart money" in real-time.

Does this represent the democratization of market intelligence, or is it an effective means of profiting from retail investors? The answer depends on whom you ask. But this phenomenon does exist and is spreading rapidly.

The "Copy Trading" Phenomenon on Capitol Hill

The STOCK Act, passed in 2012, requires members of Congress to publicly disclose their stock trades (and their spouses' trades) within 45 days. The act aims to promote transparency and accountability while also giving rise to an unexpected ancillary industry.

Legen, the 28-year-old founder of InsiderWave, stated that he began following Pelosi's disclosed trades with an initial investment of $38,000 in December 2023. Over the next two years, this amount has rolled into millions.

When discussing his strategy, Legen joked, "If you can't beat them, join them." Frustrated with the incomplete data provided by existing tools, he developed InsiderWave. This app aggregates congressional members' portfolios, sends alerts when new trades are disclosed, and supports users in copying trades to their associated brokerage accounts with one click.

Pelosi's options trades in January 2025 are quite representative. Her spouse purchased call options for Tempus AI at a strike price of $20, Alphabet at $150, Nvidia at $80, and Amazon at $150 (contracts betting on price increases). According to this week's latest disclosures, these options have been exercised and profited. This means that users who followed these trades also share in the profits.

The challenge is that when trades are made public, they are often "old news" from weeks or even months ago. The 45-day reporting window means that retail copy traders are always a step behind. However, Legen argues that the real profits are realized gradually over months, not in just a few days, so the impact of this delay is not as significant as it may seem.

From Wall Street to Prediction Markets

If tracking congressional trades provides a way to access "insider" information, then prediction markets open another door, where the rules are even murkier.

Polymarket is a cryptocurrency-based prediction platform that was valued at $8 billion by the Intercontinental Exchange (ICE) last year. It attracts both legitimate traders and those who may possess non-public information like a magnet. Unlike stock market insider trading, which can lead to criminal penalties, prediction markets exist in a regulatory gray area. The U.S. Commodity Futures Trading Commission (CFTC), which oversees these markets, has not explicitly prohibited trading based on privileged information.

This creates obvious opportunities for misuse. Last month, a trader named AlphaRaccoon reportedly netted over $1 million in 24 hours by betting on Google's "Yearly Hot Searches" with an unusually high accuracy rate. This trader accurately predicted 22 out of 23 highly specific outcomes, including which niche figures would appear in exact ranking positions. This individual had previously profited $150,000 by accurately predicting the exact release date of Google's Gemini 3.0 model.

Tre Upshaw developed a tool specifically to detect such patterns. The 29-year-old Air Force veteran and former professional esports player launched Polysights in March 2025 to track suspicious wallet activity on Polymarket. The system scans every transaction on the platform and filters signals that suggest insider information, such as newly created wallets, concentrated positions, and unusual bet sizes relative to account history.

"I've seen the most blatant insider traders among those involved with MicroStrategy," Tre Upshaw said, "They use the same wallet across two or three markets and then activate new ones after a while."

According to timestamped, verifiable posts on X, Polysights has achieved an 18-3 record in publicly identifying insider trading, with an 85% success rate. However, Upshaw also admits that his methodology has limitations.

Limitations of Pattern Recognition

Upshaw openly acknowledges his cases of loss, revealing the risks in this field. His three misjudgments occurred in the Lord Miles market, the timing prediction for Gemini 3.0's release, and the Federal Reserve's interest rate cut prediction.

Among these, the Lord Miles incident is particularly cautionary. Polysights had flagged some insider wallets accumulating "yes" positions at low prices. The market then doubled. However, shortly after, Miles himself and those same wallets shorted the market, leading to significant losses for followers. Although the tool detected reversal signals, Upshaw's team stuck to their original judgment and doubled down on their bets.

"Even though our tool successfully captured a 'no' buy signal before the crash, we failed to anticipate that he would use so many means and maintained a bullish stance, ultimately leading to losses," Upshaw admitted.

The failure in the Federal Reserve market exposed another issue. Certain markets involve too many external variables, making it difficult for insider detection to operate reliably. "This was purely a bad judgment," Upshaw stated, "For such large-scale markets involving numerous external quantitative variables, it's hard to accurately identify insider traders."

These failure cases reveal the inherent contradictions in the insider tracking industry. The relevant tools can identify patterns associated with insider activities but cannot prove their causal relationships. A newly created wallet making concentrated bets could belong to an insider, a highly skilled trader, a manipulator setting a trap for followers, or merely a lucky ordinary person.

Reflexivity Issues

The more users there are tracking these signals, the more likely the signals themselves become unreliable. This is the reflexivity problem that plagues all strategies based on mimicking others.

If 30,000 Polysights users flood into a market after receiving an "insider alert," they themselves will drive price movements. The original insider trader (if one indeed exists) may have already exited. Worse, savvy market participants may deliberately create false insider signals to profit by trading ahead of the followers.

On Polymarket, anyone can open multiple wallets with new funding, creating the illusion of coordinated insider buying, and profit when retail followers rush in. Similar manipulation risks exist in the congressional trading realm, albeit through different mechanisms. Theoretically, malicious actors could synchronize their operations according to known trading patterns of politicians, thereby creating false signals.

On this issue, neither InsiderWave nor Polysights has a clear solution. Both rely on an assumption: that true insider signals will ultimately prevail over market noise. Early data suggests they may be right, but the sample size remains limited.

The Business of "Trackers"

Tracking insider activity seems to have become a lucrative business. Polysights has received funding from Polymarket and is currently undergoing a $2 million VC funding round. The company has also hired engineers and plans to launch several paid features, including automated trading workflows and a collective intelligence community.

In contrast, InsiderWave is smaller in scale. Founder Legen claims to have invested $200,000 of personal funds in its development. The app is currently free to download, and its commercialization model is still being explored.

Of course, there are more entrants in this space. Blockchain analytics company Nansen launched its "Self-Directed Trading" product last week, based on over 500 million tagged wallet addresses. Its selling point is similar: allowing retail investors to see the movements of smart money and act accordingly. Nansen CEO Alex Svanevik stated in a press release, "This is the most important product launch in Nansen's history." The company has partnered with Jupiter, OKX, and LI.FI, allowing users to trade directly based on insider signals.

Notably, Polymarket's funding brings an interesting positional issue. The success of Polysights depends on the success of Polymarket, and vice versa. A tool that helps users identify and profit from insider activities can be seen as purifying the market or as legitimizing improper behaviors.

Currently, all three founders position their work as "democratization." The information they track—whether congressional disclosures or on-chain transactions—is already public. What they do is simply enable retail traders lacking resources to monitor this information and turn it into actionable strategies.

Looking Ahead

The controversy over congressional figures profiting from insider trading continues to simmer. President Trump has publicly accused Pelosi of illegally profiting from stock trading, while many on the other end of the political spectrum have countered that the president himself is involved in improper insider trading. While the STOCK Act may push for change, the American public seems to be growing numb to it.

Americans may be powerless to change the rules of insider trading, but that doesn't stop them from trying to get a piece of the pie. Applications tracking insider trading are rapidly expanding: Polysights reports 7,200 active users each month searching for trading signals on Polymarket; InsiderWave claims its download rate is accelerating. Many traders have now reached a consensus: since the game rules are inherently skewed, it’s better to follow in the footsteps of insider traders directly.

Of course, using these tools comes with risks. Users may be tempted to follow trades that lead to losses; the market is ever-changing, and situations can shift at any moment. But for those who feel excluded from the information game, the allure of such tools is hard to resist.

"Public data can create a fair competitive environment," Legen said, "as long as you know where to look."

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