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Tracking Michael Burry’s $1.6 billion ’Big Short’ bet

Tracking Michael Burry's $1.6 billion ’Big Short' bet

In a surprising turn of events last month, renowned investor Michael Burry once again captured the attention of the finance world with his audacious move, reminiscent of his iconic ‘Big Short’ bet in 2008. 

But this time, the target of his financial prowess isn’t the housing market, but rather, the US stock landscape. 

Notably, Burry made headlines by acquiring 40,000 put options linked to SPDR S&P 500 ETF Trust (SPY) and Invesco QQQ Trust (QQQ) funds, effectively crafting a staggering $1.6 billion short position against the largest stock market indexes – S&P 500 and Nasdaq 100. 

It’s crucial to emphasize that he spent approximately $26.5 million to establish this position, with $1.6 billion representing the notional value.

How are Burry’s new short positions performing? 

When Burry’s latest ‘Big Short’ was unveiled in August, it was also revealed that the two positions made up more than 90% of the investor’s portfolio. However, it remains unknown whether the popular hedge fund manager is still holding those positions.

Assuming that he does, they are far from being successful at the time being. In particular, Burry is down around 50% on his S&P 500 and Nasdaq shorts, according to calculations by X (Twitter) trader Gurgavin revealed on September 21. 

“Michael Burry is now only down 50% on his “$1.6 billion” S&P 500 and Nasdaq short if he is still holding it.” 

– Gurgavin noted.

But although the two indexes have been trending down lately, they remain up more than 13% and 35% since the start of the year, respectively. 

Nasdaq-100 year-to-date chart. Source: TradingView

Burry became famous in the mid-2000s after successfully predicting the collapse of the US housing market. The investor established a substantial short position against the market at the time, which made him hundreds of millions of dollars. 

Since then, Burry made several more controversial and unconventional predictions, though almost none of them came to fruition. 

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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

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