Michael Burry puts $1.6 billion into put options
Burry's Scion Asset Management put $1.6 billion to work betting against the stock market.
Michael Burry was immortalized in the film "The Big Short" for calling out the impending housing crisis that nearly crippled the global economy and making a bunch of money in the process.
His name has reached legendary status, so when he makes big moves -- especially big moves that bet against the market -- people sit up and pay attention.
DON'T MISS: 'Big Short' Michael Burry admits he made a bad call
On Monday it was revealed that Burry held bearish bets against the S&P 500 and Nasdaq, according to securities filings released Monday, to the tune of over a billion dollars.
Burry 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.
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Scion also closed its stakes in regional banks Western Alliance (WALPL) - Get Free Report, Huntington Bank (HBAN) - Get Free Report, PacWest (PACW) - Get Free Report and First Republic during the quarter, signaling his concern with the banking sector.
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.
Put options increase in value when the underlying asset decreases in price.
Burry's moves during the second quarter came while the stock market saw a strong rally, and some people are not convinced of his prescience.
"The guy had one good trade over a decade ago," one Twitter user said.
Michael Burry is the king of all finance LARPS.
The guy had one good trade over a DECADE ago and you still have NPCs worshipping him and retweeting every time he buys puts because they saw him in a movie.
Send every equity index to fresh highs.— BIG DICK BULL (BDB) (@BigDickBull69) August 14, 2023
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