NEW YORK, Nov 14 (Portal) – Hedge fund manager Michael Burry, whose bets against the U.S. housing market before the 2008 financial crisis were documented in the film “The Big Short,” built a bearish options position on semiconductors in the third quarter. while some other investors also reduced their exposure to the sector, according to securities disclosures released on Tuesday.
Burry also ruled out bearish options against the broader S&P 500 and Nasdaq 100 indexes, according to the filing.
His Scion Asset Management’s largest new position last quarter was bearish options on an exchange-traded fund focused on semiconductors. According to the documents, he bought $47.4 million in put options against the iShares Semiconductor ETF (SOXX.O). The ETF is up 45.37% year-to-date.
Notional value refers to the total value of the underlying securities controlled by options contracts. This is different from the price paid for the contracts or their actual cash value, which, while not disclosed in regulatory filings, is likely a much smaller figure.
The filing also showed that Burry’s fund no longer held put options on the Nasdaq 100 and S&P 500. In the second quarter, Burry’s firm held $739 million in notional put options against the popular Invesco QQQ Trust ETF (QQQ.O) and separate $886 million in put options against the SPDR S&P 500 ETF (SPY.P).
The S&P 500 fell 3.6% in the third quarter, while the Nasdaq 100 lost 3%.
Put options convey the right to sell stocks in the future at a fixed price and are typically purchased to express a pessimistic or defensive stance.
It was not clear how Burry’s option position had developed. Regulatory filings do not require disclosure of option exercise prices, purchase prices and expiration dates. Since only long positions are disclosed in the documents, it was also not clear whether the positions were held directly or against other contracts.
Some other well-known investors also changed their positions in the semiconductor sector. Soros Fund Management, the asset manager of billionaire George Soros’ Open Society Foundations, has divested its 10,000 shares of Nvidia (NVDA.O) and added 80,000 shares of US-listed Taiwan Semiconductor Manufacturing Company (TSMC).
Hedge fund Man Group also sold its 1.1 million shares of Nvidia, while Renaissance Technologies LLC sold its entire stake in the company. However, Tiger Global Management and Eisler Capital increased their stakes in Nvidia.
Man Group and Duquesne Family Office have liquidated all of their shares in TSMC, a filing shows.
Depositary receipts at TSMC rose 32.8% this year and fell nearly 14% in the third quarter. Shares of Nvidia are up 240% year to date and have gained 2.8% in the most recent quarter.
Reporting by Carolina Mandl, in New York; Editing by David Gregorio, Anna Driver and Deepa Babington
Our standards: The Trust Principles.
Acquire license rights, opens new tab
Originally posted 2023-11-15 15:00:20.