Burry, famous for ‘Big Short,’ bought bearish options against S&P, Nasdaq 100

By David Randall and Saqib Iqbal Ahmed

NEW YORK (Reuters) -Michael Burry, the money manager made famous in the book and film “The Big Short,” held bearish options against the broad and at the end of the second quarter, according to securities fillings released on Monday.

Burry’s Scion Asset Management bought put options with a notional value of $739 million against the popular Invesco QQQ Trust ETF during the quarter, and separate put options with a notional value of $886 million against the SPDR S&P 500 ETF (NYSE:).

Put options convey the right to sell shares at a fixed price in the future and are typically bought to express a bearish or defensive view.

It was not clear what the fund paid to buy the puts – an amount that could be a small fraction of their notional value – or the contracts’ present value, given that regulatory filings do not require the disclosure of options strikes, purchase prices and expiration dates.

Since the filings disclose only long positions it was also not clear whether the puts were held outright or as part of a larger trade involving other contracts that might have been sold short.

Burry rose to fame with his bets against the U.S. 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.

The S&P 500 is up roughly 17% for the year to date while the Nasdaq 100 is up nearly 39% over the same period. Outsized gains in a handful of megacap companies such as Nvidia (NASDAQ:) and Meta Platforms have fueled much of the year’s rally.

The filing also showed that the fund liquidated its stakes in Chinese e-commerce company JD (NASDAQ:).com and Alibaba (NYSE:) Group Holdings, as well as regional banks including PacWest and Western Alliance (NYSE:) Bancorp that it had bet on in the first quarter.

The firm noted it had sold its 150,000 shares of First Republic Bank (OTC:) as well, but did not indicate whether that came before the company’s May 1 collapse.

Among its long positions, the fund more than doubled its stake in online luxury goods market RealReal (NASDAQ:) Inc, which is up nearly 100% for the year to date, and added new stakes in iHeartMedia (NASDAQ:), HanesBrands, and Warner Bros. Discovery (NASDAQ:), among others, the filing showed.

Shares of iHeartMedia and HanesBrands are each down 16% or more for the year to date, while shares of Warner Brothers Discovery are up nearly 43%.

The firm also added 10,000 shares of the iShares MSCI Japan ETF, which is up 13.5% for the year to date.

Scion Asset Management did not respond to a request for comment. Its positions were reported in quarterly filings known as 13-fs, which show its holdings at the end of the most recent quarter and may not reflect current positions. While backward- looking, these filings are one of the few ways that investors can see the positions of institutional investors such as hedge funds.

Burry, who frequently turns over his portfolio, drew wide attention last August when he dumped all of his long positions and bought a stake in prison company Geo Group (NYSE:) Inc. He no longer owns shares of the company.