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Soros doubles a bearish bet on the S&P 500, to the tune of $1.3 billion
Soros Fund Management has doubled up a bet that the S&P 500 SPX is headed for a fall.
Within Friday’s 13F filings news was the revelation that the firm, founded by legendary investor George Soros, increased a put position on the S&P 500 ETF SPY by a whopping 154% in the fourth quarter, compared with the third. (A put or short position basically gives the owner the right to sell a security at a set price for a limited time, and in making such a bet, an investor generally believes the security is going to decline.)
The value of that holding, the biggest position in the fund, has risen to $1.3 billion from around $470 million. It now makes up a 11.13% chunk of all reported holdings. It had been cut to 5.14% in the third quarter, from 13.54% in the second quarter, which itself marked another dramatic lift on the bearish call. The numbers can be found at Whalewisdom.com, which makes them slightly easier to digest than the actual SEC filing.
Writing on the Bullion Baron blog, Joseph has been quick to alert readers to the hedge fund’s bets on the S&P 500, offering up a summary of changes to that call from mid-2011 onward. For the four quarters of 2013, that short has followed a pattern of big highs and big lows.
Bullionbaron.com
Of course, Joseph said, the bearish S&P call could be a hedge and, as it’s six weeks into the next reporting period, it may have already been reduced or increased. But he said it could also be indicative of jitters: In January, Soros highlighted risks coming out of China and drew a comparison with the lead-up to the crash of 2008.