Renowned fund manager Michael Burry, featured in the book and movie 'The Big Short', has taken a bearish stance on the broader market, as recently released stock filings due to regulatory agency this agency revealed. Reuters press release.
At the end of the second quarter, Burry's Scion Asset Management positioned itself against the S&P 500 and Nasdaq 100 indices, using put options to represent this outlook.
During the quarter, Scion Asset Management took strategic action by buying $739 million in put calls against the Invesco QQQ Trust ETF and an additional $886 million in put options on the SPDR S&P 500 ETFs.
These put options, which allow the stock to be sold at a predetermined price in the future, reflect a bearish or defensive outlook.
The exact cost of acquiring these put options has yet to be disclosed, as regulatory filings do not require disclosure of the strike price, cost of purchase, or expiration date. The filings only detail long positions, leaving uncertainty as to whether the put options are part of larger trades or are held outright.
Burry's bold bet before the 2008 financial crisis
Burry became famous for his wise bets against the U.S. housing market prior to the 2008 financial crisis. His story was chronicled in Michael Lewis' book "The Big Short" and the series. later film adaptation.
Despite Burry's pessimistic outlook, the S&P 500 is up about 17% year-to-date, while the Nasdaq 100 is up nearly 39% year-over-year.
This rally was largely driven by the impressive performance of large-cap companies like Nvidia and Meta Platforms. The filing also revealed that Scion Asset Management's decision to liquidate stakes in Chinese e-commerce giant JD.com, Alibaba Group Holdings, as well as regional banks such as PacWest and Western Alliance Bancorp was staked. in the first quarter.
In addition, the company sold 150,000 shares of First Republic Bank but did not specify when the company would collapse on May 1.
Among portfolio adjustments, Scion Asset Management has significantly increased its position in the online luxury goods marketplace RealReal Inc., which has grown by nearly 100% year-to-date. The company also added new shares in iHeartMedia, HanesBrands, and Warner Bros. Discover, among others.
