Michael Burry shorts Major index in sizable bets
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Michael Burry shorts Major index in sizable bets
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Re: Michael Burry shorts Major index in sizable bets
#2Burry and his Scion Asset Management fund bought put options (contracts giving the option to sell at a certain price) with a value of $886 million against the SPDR S&P 500 ETF Trust which tracks the S&P 500. Scion also bought put options totaling $739 million against against the Invesco QQQ Trust ETF QQQ that tracks the Nasdaq 100.
The $1.6 billion Scion spent betting against the market represents 93% of the fund's entire portfolio.
This is a reversal from the bank buying spree Scion went on in the first quarter before economic stress led to the dissolution of multiple mid-sized banks.
The S&P 500 and Nasdaq have actually had strong years so far in 2023, climbing 17% and nearly 40%, respectively.
Re: Michael Burry shorts Major index in sizable bets
#3He's not short the index, he's long the puts. Different convexity profile.
Re: Michael Burry shorts Major index in sizable bets
#4Burry and his Scion Asset Management fund bought put options (contracts giving the option to sell at a certain price) with a value of $886 million against the SPDR S&P 500 ETF Trust which tracks the S&P 500. Scion also bought put options totaling $739 million against against the Invesco QQQ Trust ETF QQQ that tracks the Nasdaq 100. The $1.6 billion Scion spent betting against the market represents 93% of the fund's e…
How often does the Nasdaq go up 40% and then stay up? I don't really know anything about the stock market, but do you really need to be a maverick to guess that it might go down again?
Re: Michael Burry shorts Major index in sizable bets
#5He's not short the index, he's long the puts. Different convexity profile.
I need some ELI5 help here. Does that mean he bet on a big, fast downward move as opposed to a slow, small downward move?
Re: Michael Burry shorts Major index in sizable bets
#6Re: Michael Burry shorts Major index in sizable bets
#7https://whalewisdom.com/filer/scion-asset-management-llc#tab...
I'm not an stock options hedge fund trading expert, does he not have to report the expiry date? These have an expiry date right? Or is it some type that doesn't expire?
Re: Michael Burry shorts Major index in sizable bets
#8You gotta give it to him. Michael Burry has predicted 20 of the last 3 crashes.
Re: Michael Burry shorts Major index in sizable bets
#9Burry and his Scion Asset Management fund bought put options (contracts giving the option to sell at a certain price) with a value of $886 million against the SPDR S&P 500 ETF Trust which tracks the S&P 500. Scion also bought put options totaling $739 million against against the Invesco QQQ Trust ETF QQQ that tracks the Nasdaq 100. The $1.6 billion Scion spent betting against the market represents 93% of the fund's e…
What is the expiration date on the puts?
Re: Michael Burry shorts Major index in sizable bets
#10That 723M$ figure for nasdaq is not the worth of the put options themselves, rather the value of the underlying shares that the contracts represent. He likely has 20K put options each for $SPY and $QQQ. No one is going to bet 93% of a portfolio is index puts. They're likely hedges worth tens of millions, not 1.5B$ in put options.