Tags: Soros | S&P 500 | gold | 13F

George Soros Takes a Giant Put Position Against the S&P 500

By John Morgan   |   Thursday, 15 Aug 2013 12:58 PM

Hedge fund titan George Soros' biggest position is a huge bearish bet that the Standard & Poor's 500 will go down, MarketWatch reported.

Soros has a history of rolling the dice on risky propositions in the past and making giant gains. He is known as "The Man Who Broke the Bank of England" because of his successful bet against the British pound that led to $1 billion in profits during the 1992 Black Wednesday U.K. currency crisis.

In its 13F Securities and Exchange Commission filing for the second quarter of 2013, Soros Fund Management reported it bought a put on 1,248,643 units of the SPDR S&P 500 Trust (SPY) exchange-traded fund (ETF) in the second quarter – its largest holding, according to MarketWatch.

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Blogger Bullion Baron estimated the SPY put position — relative to the total size of the fund — rose from 1.28 percent to 4.79 percent in the first quarter, more than tripling. It also went up 13.54 percent in the second quarter, nearly tripling again, Bullion Baron said.

The blogger noted Soros' British pound coup and rumors that Soros also did well with a $1 billion bet that the price of gold would go down, which it has recently.

"We heard when he made $1 billion betting against the yen," Bullion Baron said. "Where are the headlines for his $1.25 billion bet against the stock market?"

During the second quarter, the 13F revealed Soros doubled his position in Apple, purchased a call position in J.C. Penney and sold shares of Citigroup and Netflix, according to MarketWatch.

It is unclear from the SEC filing whether Soros has yet registered a profit on the bearish S&P bet, MarketWatch reported, because it is not known when in the second quarter he took on the position. The S&P 500 ended the second quarter with a 2.4 percent gain, and is up so far in the third quarter with a gain of about 5 percent.

However, the puts might not necessarily mean he is bearish on stocks, according to Barron's.

"It’s worth pointing out Soros is long a slew of individual stocks, where he has a lot more capital at risk than he does in these (relatively cheap) put options. The puts are instead likely part of a hedging strategy whose use and details we won’t fully divine from a regulatory filing, Barron's noted.

The 13F also revealed Soros held 66,800 shares of Apple as of June 30, well ahead of the big gains the iPhone maker enjoyed this week after corporate raider Carl Icahn revealed a $1 billion stake in the company.

The SEC filing also revealed Soros sold large long positions in the SPDR Gold Trust and the Market Vectors Gold Miners ETF during the second quarter, but that he still held a 1.2 million share stake in Market Vectors Junior Gold Miners ETF, plus both put options and call options individual gold mining stocks, Barron's said.

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