According to reports, famed investor Michael Burry, who is credited with foreseeing the 2008 housing bubble collapse as dramatised in the film “The Big Short,” has taken a sizable short position against two important market indexes.
According to the Michael Burry Stock Tracker account on social media, Burry has invested $740 million in puts against QQQ, an ETF tracking the NASDAQ-100 Index, which represents 100 of the largest non-financial companies listed on the NASDAQ stock exchange, and $890 million in puts against SPY, which tracks the S&P 500, a benchmark for large-cap U.S. stocks. Now, allegedly, these short positions account for an eye-catching 93% of his whole portfolio.
Many cryptocurrency enthusiasts who think that Bitcoin might serve as a hedge if such a crash occurs were drawn to the short bets.
However, the release has come under fire from social media users who are knowledgeable with the nuances of financial reporting. Some people pointed out that the data, which came from a June 30 13F form, may be a little out of date and that Burry may have started the trades even weeks earlier and may have already closed them out.
Another user emphasised the possibility of misrepresentation of the option holdings, saying the statistics may really represent the notional value of the shares underpinning such contracts rather than the actual worth of the contracts.
Some people also drew attention to possible errors in the stated market value of the options, implying a mismatch between the price of the options and the worth of the underlying shares.
Burry’s actions are expected to spark curiosity given his prior impact on the financial landscape. But it’s equally crucial for investors to look for complete details and context.
