The ‘Big Short’ investor who called the 2008 stock market has made a $1.6bn (£1.3bn) bet on a second crisis by the end of this year.
Michael Burry, the Wall Street trader who predicted America’s subprime mortgage crisis in the 2000s, the spark which ignited a global financial meltdown, has made a bet against the S&P 500 and Nasdaq 100 stock indices, according to filings with the Securities and Exchange Commission, the American financial regulator.
Mr Burry’s firm, Scion Asset Management, has bought $866m in “put options” against a fund that tracks the S&P 500, the American benchmark index. These give investors the right to sell shares at a fixed price in the future and means that he could make a profit if shares fall.
The firm has also bought $739m in bets against a fund that tracks the Nasdaq 100, which follows some of America’s largest technology companies.
Such is his conviction, Mr Burry is using more than 90pc of his fund’s portfolio to bet on the downturn, according to reports.
The interesting thing is, well, why would anyone bother to be in the fund in that case? It’s possible to short directly…..
It was difficult to go short housing. Short stock indices is something you can do on your phone.