Money manager Michael Burry – made famous in the book and movie “The Big Short” – kept his bearish options against the S&P 500 Index and Nasdaq 100 broadly at the end of the second quarter, reports Reuters on August 14.
During the quarter, Burry’s Scion Asset Management bought a nominal $739 million put option against the popular Invesco QQQ Trust ETF. Additionally, it offers options with a nominal value of $886 million against the SPDR S&P 500 ETF, the report added.
Options convey the right to sell the stock at a fixed price in the future and are often purchased to represent a bearish or defensive stance.
Although it is not clear how much the fund paid to buy the put options or the current value of the contract, as regulatory filings do not require disclosure of option strikes, purchase prices and expiration dates. As per details, put options are an amount that can be a fraction of their nominal value.
Additionally, it is unclear whether the trades were made entirely or as part of a broader transaction involving other contracts that may have been shorted.
Reportedly, Burry became famous for his bets on the US housing market before the 2008 financial crisis. His non-fiction book ‘The Big Short’ was released in 2010 and an electric version. Photo released in 2015.
The S&P 500 is up about 17% year-to-date while the Nasdaq 100 is up nearly 39% year-over-year. The outperformance of some large-cap companies like Nvidia and Meta Platforms fueled much of the year’s gains.
According to securities filings released on Monday, the fund liquidated its stakes in Chinese e-commerce firm JD.com and Alibaba Group Holdings, as well as regional banks including PacWest and Western Alliance. Bancorp that they bet on in the first quarter.
Burry asset manager Scion noted that it also sold 150,000 shares of First Republic Bank, however, it did not say whether that would happen before the company’s May 1 collapse. Are not.
The filing shows the fund – among long positions – has more than doubled its stake in online luxury goods marketplace RealReal Inc, is up nearly 100% this year and added new shares to iHeartMedia, HanesBrands and Warner Bros. Discover, among others.
Shares of iHeartMedia and HanesBrands are both down 16% or more this year, while shares of Warner Brothers Discovery are up nearly 43%.
The company also added 10,000 shares of the iShares MSCI Japan ETF, up 13.5% on the year.
With agent input.
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Update: August 15, 2023, 03:15 p.m. IST