'Big Short' investor Michael Burry appears to bet on US market crash with $1.6 billion position against the S&P 500 and Nasdaq indexes
- Investor Michael Burry appears to be betting on a US market crash
- He made bearish bets against the S&P 500 and Nasdaq worth $1.6 billion
- Burry also took new long positions in energy, travel and media companies
Michael Burry, the money manager made famous in the book and film 'The Big Short,' appears to be betting on a major downturn in the US stock market.
Burry held bearish positions against the S&P 500 and Nasdaq 100 Index worth a combined $1.6 billion at the end of the second quarter, according to securities fillings released on Monday.
The founder of Scion Asset Management bought put options against $739 million worth of shares in the popular Invesco QQQ Trust ETF during the quarter, and separate put options against $886 million worth of the SPDR S&P 500 ETF.
Put options convey the right to sell shares at a fixed price in the future. They typically increase in value if the price of the underlying stock declines, making them a defensive bet.
The dollar amounts of the positions refer to the value of the underlying securities, but the new filings do not reveal how much money Burry actually put on the line, because they don't show the specific terms of the options he purchased.
![Michael Burry, the money manager made famous in the book and film 'The Big Short,' appears to be betting on a major downturn in the US stock market](https://i.dailymail.co.uk/1s/2023/08/15/17/74342393-12409437-image-a-16_1692115351941.jpg)
Michael Burry, the money manager made famous in the book and film 'The Big Short,' appears to be betting on a major downturn in the US stock market
![Christian Bale portrayed Burry in the 2015 film The Big Short. Burry rose to fame with his bets against the US housing market before the 2008 financial crisis.](https://i.dailymail.co.uk/1s/2023/08/15/17/74342391-12409437-image-a-17_1692115360277.jpg)
Christian Bale portrayed Burry in the 2015 film The Big Short. Burry rose to fame with his bets against the US housing market before the 2008 financial crisis.
Options contracts grant the holder the right to buy (in the case of calls) or sell (in the case of puts) a block of 100 shares of the security in question, at a specific price and by a specific date.
Their value can swing rapidly, depending on the strike price and expiration date, in comparison with changes to the price of the underlying security.
Burry rose to fame with his bets against the US housing market before the 2008 financial crisis. Michael Lewis' nonfiction book 'The Big Short' was released in 2010 and the movie version came out in 2015.
He also profited in the early 2000s by shorting high-flying tech stocks during the peak of the Dot Com bubble.
However, his bets have sometime appeared to misfire. In late 2020, he initiated short positions against Tesla stock, but later said it was just 'a trade' and he'd exited the position after Tesla's stock continued to soar, according to CNBC.
It was not clear how Burry's recent options bets against the Nasdaq and S&P 500 had fared, given that regulatory filings do not show the terms of the contracts.
Since the filings disclose only long positions it was also not clear whether the puts were held outright or against other contracts that were held short.
That means Burry's bets against the market may be part of a more complex trade or long-term strategy that can't be deduced from the filing alone.
So far this year, the S&P 500 is up roughly 17 percent, while the Nasdaq composite is up nearly 32 percent over the same period.
Outsized gains in a handful of tech megacap companies such as Nvidia and Meta have fueled much of the year's rally.
![So far this year, the S&P 500 is up roughly 17 percent and in a new bull market](https://i.dailymail.co.uk/1s/2023/08/15/17/74342373-12409437-image-m-22_1692115629831.jpg)
So far this year, the S&P 500 is up roughly 17 percent and in a new bull market
![The Nasdaq composite is up nearly 32 percent for the year, fueled by outsized gains in a handful of tech megacap companies such as Nvidia and Meta](https://i.dailymail.co.uk/1s/2023/08/15/17/74342365-12409437-image-m-23_1692115638456.jpg)
The Nasdaq composite is up nearly 32 percent for the year, fueled by outsized gains in a handful of tech megacap companies such as Nvidia and Meta
Big tech stocks have been fueled by investor excitement in the potential applications of artificial intelligence, as well as the prospect that the Federal Reserve will soon end its inflation-fighting rate hikes.
Meanwhile, Burry's fund has also liquidated its stakes in Chinese e-commerce companies JD.com and Alibaba Group Holdings, as well as regional banks PacWest and Western Alliance Bancorp, the new filing shows.
The fund also increased its holdings in stocks related to oil and gas, media, and travel and tourism.
Among its long positions, the fund more than doubled its stake in online luxury goods market RealReal Inc, which is up nearly 100 percent for the year to date.
It also added new stakes in iHeartMedia, Carter Communications, and Warner Bros. Discovery, among others, the filing showed.
The fund also added a huge new position in Expedia Group worth $10.9 million, and a block of shares in MGM Resorts International worth $6.6 million.
Scion Asset Management did not respond to a request for comment.
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