“Michael Burry is now down 42% on his “$1.6 billion” S&P 500 and Nasdaq short if he is still holding it.” a popular Twitter user Gurgavin noted.

Michael Burry is famous for making $100 million on shorting the stock market in 2008. In January 2023 he famously posted “SELL” on Twitter, making another one of his doom and gloom predictions. That one didn’t turn out to be true and he admitted he was wrong in March 2023.

While the total value of his current short bet is $1.6 billion, he actually spent much less.

According to Gurgavin’s estimates, the fund manager “likely only spent around $26.5 million to build his $1.6 billion dollar (notional) short position.”

Burry invested $18 million on 20,000 SPY put options and about $8.5 million on 20,000 QQQ puts, Gurgavin clarified. Buying put options is a highly leveraged way to bet the stock market will go down.

Burry’s short bet was revealed in his June 13F statement, which came out June 30th. We don’t know what date the actual put options were purchased, but it’s safe to assume it could be as early as May, when S&P 500 index was as low as 4122. It currently sits at 4468 and it’s safe to assume Burry’s short positions are decimated. Options have a high burn rate and require the market to go in the right directions quickly.