Misleading reports: Michael Burry bought $1.6 billion of $SPY and $QQQ puts.
Many headlines are stating that Michael Burry just bought $1.6 billion of $SPDR S&P 500 ETF(SPY.US$ and $Invesco QQQ Trust(QQQ.US$ puts.
However, this is very misleading as the real value of the puts he bought is much LOWER.
NOMINAL VALUE is reported, not the amount Burry paid for the puts.
However, this is very misleading as the real value of the puts he bought is much LOWER.
NOMINAL VALUE is reported, not the amount Burry paid for the puts.
Due to the way options are reported, this is a common misconception.
Calculated portfolio weighting for options is incorrect because nominal value is reported.
Nominal value is calculated as "the number of option contracts" × 100 × "the value of the underlying security."
Calculated portfolio weighting for options is incorrect because nominal value is reported.
Nominal value is calculated as "the number of option contracts" × 100 × "the value of the underlying security."
Given that 2,000,000 "shares" of each position are held, we can extrapolate that 40,000 contracts were purchased.
This is computed by taking (2,000,000 * 2) / 100 = 40,000.
The NOMINAL value of these 40,000 contracts is $1.6 billion.
This is computed by taking (2,000,000 * 2) / 100 = 40,000.
The NOMINAL value of these 40,000 contracts is $1.6 billion.
However, in reality, Michael Burry spent much less than $1.6 billion to buy these 40,000 contracts.
He didn't report the price paid per contract but say we take the November 17th, 2023 puts for $QQQ and $SPY.
The expiration date on puts are 95 days out from today.
He didn't report the price paid per contract but say we take the November 17th, 2023 puts for $QQQ and $SPY.
The expiration date on puts are 95 days out from today.
$SPDR S&P 500 ETF(SPY.US$ puts at a $440 strike are trading at $8.60 and $Invesco QQQ Trust(QQQ.US$ puts at a $369 strike are trading at $12.60.
Take 20,000 of each and you get (20,000*$8.60) + (20,000*$12.60) = $424,000.
While we don't know the price paid per contract, the total is MUCH LOWER than $1.6 billion.
Take 20,000 of each and you get (20,000*$8.60) + (20,000*$12.60) = $424,000.
While we don't know the price paid per contract, the total is MUCH LOWER than $1.6 billion.
While Michael Burry did buy shorts on $QQQ and $SPY, the value is MUCH lower than $1.6 billion.
When you see headlines about options on a 13F, remember nominal value is reported.
When you see headlines about options on a 13F, remember nominal value is reported.
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i short the sheriff : good number crunching, if that is true, then MB has a view of declining tech stocks
MrM : The question is will he finally be right this time round?
RightTime MrM: He has a record of being wrong most of the time, but when he gets it right, it is payday for him. Regarding China's economy, my opinion is they won't be staying down for long... The have the people, resources and general hard working culture.
MrM RightTime: Michael Burry Bets Against the Market. Crash Incoming? Pretty interesting take on it.
Btan : The US market is inflated
RightTime : In 2005, Predicted the collapse of the subprime mortgage market
-> Housing market crashes in 2008, Global Financial Crisis.
On Dec 2015, he predicted that the stock market would crash within the next few months.
-> SPX +11% Next 12 months
On May 2017, he predicted a global financial meltdown-> SPX +19% Next 12 months
On Sept 2019, he predicted that the stock market would crash due to a bubble in index ETFs -> SPX +15% Next 12 months
On March 2020, he revealed a massive bearish bet-
> SPX +72% Next 12 months
On Feb 2021, he predicted that the stock market would crash due to a speculative bubble. Shorts Tesla.
-> SPX +16% Next 12 months
On Sept 2022, he predicted that the stock market warned of more failures, bottom not hit yet.
-> SPX +21% Next 11 months
On Jan 2023, he predicts a recession and new round of inflation. Says “ SELL”
-> SPX +17% Year to Date
On Aug 2023, Reveals Short Positions on the SPY and QQQ
牛逼 RightTime: hahaha, the boy who cried wolf....
Btan : Haha Burry buried himself
SkeShark : But the market is too hot now. A correction is impending. And "correction" is a massive understatement
peace24z MrM: I don't think I can talk