Famous for 'Big Short', Michael Burry bought bearish options against S&P 500, Nasdaq 100: Report
Reuters on 14 August. During the quarter, Burry's Scion Asset Management bought put options with a notional value of $739 million against the popular Invesco QQQ Trust ETF. Also, it put options with a notional value of $886 million against the SPDR S&P 500 ETF, the report added.
The options convey the right to sell shares at a fixed price in the future and are typically bought to express a bearish or defensive view. Though it was not clear what the fund paid to buy the puts or the contracts' present value, given that regulatory filings do not require the disclosure of options strikes, purchase prices, and expiration dates. As per details, the put is an amount that may be a small fraction of their notional value.
Apart from this, it was not clear if the puts were held outright or as part of a more extensive trade involving other contracts that might have been sold short. It is to be known that Burry rose to fame with his bets against the U.S. housing market before the 2008 financial crisis.
His nonfiction book 'The Big Short' was released in 2010 and the movie version came out in 2015. The S&P 500 is up roughly 17% for the year to date while the Nasdaq 100 is up nearly 39% over the same period. Outsized gains in a handful of mega-cap companies such as Nvidia and Meta Platforms have fueled much of the year's rally.
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