NEW YORK, Nov 14 (Reuters) – Hedge fund manager Michael Burry, whose bets on the U.S. housing market before the 2008 financial crisis were chronicled in the movie “The Big Short,” announced his bearish outlook on semiconductors in the third quarter. Added option positions. Meanwhile, other investors also reduced their exposure to the sector, according to securities transactions announced on Tuesday.
Barry also closed bearish options on the entire S&P 500 and Nasdaq 100 indexes, according to the filing.
His largest new position at Scion Asset Management last quarter was a bearish option on a semiconductor-focused exchange-traded fund. He purchased a put option with a notional value of $47.4 million on the iShares Semiconductor ETF (SOXX.O), according to the filing. The ETF has gained 45.37% since the beginning of the year.
Notional amount refers to the total amount of the underlying security controlled by the option contract. This is different from the price paid for the contract or its actual present value. Although not disclosed in regulatory filings, the number could be much lower.
The filing also showed that Barry’s fund no longer owns puts on the Nasdaq 100 and S&P 500. In the second quarter, Barry’s firm held put options with a notional value of $739 million on the popular Invesco QQQ Trust ETF (QQQ.O) and another ETF. A put option on the SPDR S&P 500 ETF (SPY.P) with a notional amount of $886 million.
The S&P 500 fell 3.6% in the third quarter, and the Nasdaq 100 fell 3%.
A put option conveys the right to sell a stock at a fixed price in the future and is typically purchased to express a bearish or defensive view.
It’s unclear what happened to Berry’s option position. Regulatory filings do not require disclosure of option exercise, purchase price, or expiration date. Because the filing only disclosed long positions, it was not clear whether the positions were held outright or against other contracts.
Other prominent investors have also changed their positions in the semiconductor sector. Soros Fund Management, the asset manager of billionaire George Soros’ Open Society Foundations, is selling off 10,000 shares of Nvidia (NVDA.O) and selling it to U.S.-listed Taiwan Semiconductor Corp. Added 80,000 shares of manufacturing company (TSMC) stock.
Hedge fund Man Group also sold 1.1 million shares of Nvidia stock, and Renaissance Technologies LLC also sold its entire stake in the company. However, Tiger Global Management and Eisler Capital added to his stake in Nvidia.
Man Group and Duquesne Family Offices liquidated all of their shares in TSMC, according to filings.
TSMC’s deposit receipts increased 32.8% this year, but fell nearly 14% in the third quarter. Nvidia stock has soared 240% since the beginning of the year and was up 2.8% last quarter.
Report by Carolina Mandl in New York.Editing: David Gregorio, Anna Driver, Deepa Babington
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