Hedge fund manager Michael Burry, best known for predicting the housing market collapse of 2008, has made another major bet predicting a Wall Street crash. According to the latest filings from the Securities and Exchange Commission, Burry’s Scion Asset Management has placed a massive $1.6 billion bet against the S&P 500 and Nasdaq 100.
Burry first rose to prominence when he became one of the first investors to anticipate and profit from the subprime mortgage crisis that crippled the housing market from 2008-2010. The story of Burry’s successful prediction—as well as the $100 million personal profit he gained from it—was chronicled in the 2010 book The Big Short, as well as a 2015 film by the same name. Since then, Burry’s personal investments have been closely followed by investors around the world.
According to the SEC filings released on Monday, Burry is now potentially holding bearish options against the Nasdaq 100 Index and the S&P 500. The documents show that Scion Asset Management purchased $739 million in put options (an agreement to sell assets at a fixed price on or before a certain date) against the Invesco QQQ Trust Exchange Traded Fund, made up of popular Nasdaq 100 companies. An additional $886 million in put options were taken out against a fund that tracks the S&P 500.
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In total, more than 93% of Burry’s entire portfolio has been used to bet against the stock market.
BREAKING 🚨:
Michael Burry just shorted the market with $1.6B
Bought $890M of $SPY Puts
Bought $740M of $QQQ PutsThis now makes up 93% of his entire portfolio
Look out below. pic.twitter.com/jiOEYxpVra
— Michael Burry Stock Tracker ♟ (@burrytracker) August 14, 2023
The filings do not reveal how much Scion paid up front for the options or when the sell-by date will be—but given that put options usually indicate a seller’s negative outlook on the market, other investors are taking notice. However, it is also worth noting that the filings report data up to June 30, meaning it is unknown whether Burry still holds the options or has sold them in the intervening time.
Scion Asset Management has also been divesting itself of shares in several regional banks and Chinese e-commerce companies like JD.com and Alibaba.
Many of Burry’s fellow investors will likely see this as another reason to fear an impending recession. The Federal Reserve has been steadily raising interest rates for more than a year in an effort to fight runaway inflation, leading to decreasing demand as the market braces for a downturn.
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