By Carolina Mandl and Saqib Iqbal Ahmed
NEW YORK (Reuters) – Hedge fund manager Michael Burry, whose bets against the U.S. housing market before the 2008 financial crisis were chronicled in the movie “The Big Short”, in the third quarter added a bearish options position on semiconductors, while some other investors also reduced their exposure to the sector, according to securities fillings released on Tuesday.
Burry also closed out bearish options against the broad S&P 500 and Nasdaq 100 Index, the filings showed.
His Scion Asset Management’s biggest new position last quarter was in bearish options on an exchange-traded fund focused on semiconductors. He bought put options with a notional value of $47.4 million against the iShares Semiconductor ETF, according to the filing. The ETF is up 45.37% year to date.
Notional value refers to the total value of the underlying securities controlled by options contracts. That is different from the price paid for the contracts or their actual present value, which while undisclosed in the regulatory filing, is likely to be a much smaller number.
The filings also showed that Burry’s fund no longer held puts on the Nasdaq 100 and S&P 500. In the second quarter, Burry’s firm held put options with a notional value of $739 million against the popular Invesco QQQ Trust ETF and separate put options with a notional value of $886 million against the SPDR S&P 500 ETF.
The S&P 500 fell 3.6% in the third quarter, while the Nasdaq 100 was down 3%.
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 how Burry’s options position had fared. 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 positions were held outright or against other contracts.
Some other well-known investors also changed their positions in the semiconductor sector. Soros Fund Management, the asset manager for billionaire George Soros’ Open Society Foundations, dumped its 10,000 shares in Nvidia and added 80,000 shares in Taiwan Semiconductor Manufactoring Company (TSMC), which is listed in the U.S.
Hedge fund Man Group also sold its 1.1 million shares in Nvidia, while Renaissance Technologies LLC sold its entire stake in the company. Tiger Global Management and Eisler Capital, however, added to their stake in Nvidia.
Man Group and Duquesne Family Office liquidated their entire stake in TSMC, a filing showed.
Depositary receipts in TSMC are up 32.8% this year and fell nearly 14% in the third quarter. Shares in Nvidia have skyrocketed 240% year to date, and were up 2.8% in the last quarter.
(Reporting by Carolina Mandl, in New York; Editing by David Gregorio, Anna Driver and Deepa Babington)
