Michael Burry Places $1.6 Billion Short Bet on S&P 500 and Nasdaq 100

Renowned investor and trader Michael J. Burry has reportedly made a substantial wager on a potential market downturn in the last quarter. He did so by purchasing put options valued at $1.6 billion on the S&P 500 and Nasdaq 100 by the end of June. According to reports from Reuters, Burry’s Scion Asset Management held put options worth $886 million on SPDR S&P 500 ETF shares and an additional $739 million on Invesco QQQ Trust ETF.

The verified Twitter account ‘Michael Burry Stock Tracker’ revealed that these derivative contracts were held during the April-June quarter, targeting 2 million shares of each ETF. It’s important to note that the total contract value of $1.6 billion reflects the combined worth of the shares against which the put options were purchased. The actual cost of acquiring the options is likely to be a fraction of the overall market value.

Although specific details such as strike prices, expiry dates, premiums paid, and the current status of these put options remain unknown, it’s noteworthy that the $1.6 billion contract value constitutes approximately 93% of Michael Burry’s reported portfolio. Those holding put options typically stand to profit when the value of the underlying security drops.

As of June 30, 2023, the SPDR S&P 500 ETF Trust (SPY) was trading at $443.28 per share, while Invesco QQQ (Nasdaq 100) was priced at $369.42. Since that time, SPY has experienced a minor increase of just under 1%, whereas QQQ’s value has remained relatively stable.

Michael J. Burry gained fame for his bold move to bet against the impending mortgage crisis, ultimately generating substantial gains for his fund during the 2008 Global Financial Crisis. His noteworthy trade was documented in Michael Lewis’ book ‘The Big Short,’ which was subsequently adapted into a feature film with the same title.