4 ms·
I'm not sure the bet is as big as it seems from the headline. When you buy options, you pay a fixed premium to get the right to buy/sell a very large value of s
by lordnacho 1y ago
I'm not sure the bet is as big as it seems from the headline. When you buy options, you pay a fixed premium to get the right to buy/sell a very large value of shares, called the notional. But the notional is not what you are losing if it goes wrong, you lose the premium. The premium can be quite a small number compared to the notional.
- selim17 1y agoYou can check here: https://www.sec.gov/Archives/edgar/data/1649339/000164933925000007/xslForm13F_X02/infotable.xml https://www.sec.gov/Archives/edgar/data/1649339/000164933925... Is this like what you say?
- humanlion87 1y agoNot the OP. I agree with what OP is mentioning. As part of the report you have to file the notional value of the underlying stock. Let's assume I buy one put option for palantir at a price of $1/contract ( say for an extremely OTM strike price of $10 ). I have paid a premium of $100. Assuming stock price of palantir is $200, the notional value I have to report is $200*100 = $20k. And not the $100 premium I paid.
- pksebben 1y agoThis seems to back that up: https://www.sec.gov/files/form13f.pdf https://www.sec.gov/files/form13f.pdf FWIG you can't actually see what premium was paid on an option unless the buyer chooses to disclose that themselves.
- JumpCrisscross 1y ago> you can't actually see what premium was paid on an option Nor the strike or tenor. (Options are more thinly traded than stocks. This confidentiality is practical.)
- ericmcer 1y agoYeah I feel like 200m of PLTR put options would distort the market so much the contracts would struggle to overcome their own premium. They must be referring the the value of the shares the contracts represent?
- smallmancontrov 1y agoOn a single contract, maybe, but remember that the counterparty is usually a market maker who doesn't take directional risk, their game is to bet that the cost of delta hedging is less than the premium they collect, and that's more of an implied vs realized volatility thing than a directional thing. Even if we took it for granted that Michael Burry was smart money, to a first order approximation the dealers don't care and would be happy to earn fees for managing his leverage.
- the-grump 1y agoYeah what usually happens is they match it with call purchases and thus they are not actually your counterparty economically. There is enough bullish momentum that a trade of this size can actually be placed (of course in chunks).
- JumpCrisscross 1y ago> PLTR put options would distort the market Puts are calls and calls are puts [1]. On a certain level, all options of a given expiry and underlying are shadows of the same object. [1] https://en.wikipedia.org/wiki/Put%E2%80%93call_parity https://en.wikipedia.org/wiki/Put%E2%80%93call_parity
- stevefan1999 1y agoOnly applies to European Options
- JumpCrisscross 1y ago> Only applies to European Options Absolutely false. Options theory typically starts with European non-dividend paying options for simplicity. PCP applies to American-style options on dividend-paying stocks, you just get a solution with pairs of inequalities defining bounds. That leads to similar arbitrage and conversion mechanics with similar implications for market participants.
- datavirtue 1y agoThey are only selling puts...that's a half-hearted short. They have the resources to borrow shares and bag the whole amount without a time constraint...why not do that?
- lukewink 1y agoSelling puts is not a short at all
- nickff 1y agoIt is commonly referred to as a ‘short position’, though it is not ‘shorting the stock’. Equally, purchasing calls* is referred to as a ‘long position’ (as is holding the equity). edit: smallmancontrov below pointed out that I wrote 'purchasing puts' was long, when I meant to write 'purchasing calls'
- smallmancontrov 1y agoSelling puts is a long position. Purchasing puts is short.
- pgwhalen 1y agoIt’s all a matter of perspective I suppose, and of course I understand why you say this, but no professional options trader I’ve ever met would speak in these terms.
- deleted 1y ago[deleted]
- deleted 1y ago[deleted]
- smallmancontrov 1y agoOnce you fully risk manage a short position and account for the price of doing so, you might realize that you have reinvented a put contract.
- drob518 1y agoYes, but premiums on NVDA and PLTR are not small as premiums go. He’s still going to be spending a huge chunk.
- JumpCrisscross 1y ago> premiums on NVDA and PLTR are not small as premiums go. He’s still going to be spending a huge chunk He may be. We may also only be seeing parts of the trade.
- blitzar 1y ago@michaeljburry - 2:04 PM · Nov 4, 2025 https://x.com/michaeljburry/status/1985709760272908614 https://x.com/michaeljburry/status/1985709760272908614 Fake news! I am not 5’6” (not that there is anything wrong with that). And journalists reporting on 13Fs, none more fake.
- the-grump 1y agoNormally I'd agree, but it's a massive holding in their disclosure. So they put a bunch of money into this bet, likely to buy distant expiries.
- deleted 1y ago[deleted]
- heisgone 1y agoIt's also likely edged in all sort of ways the article doesn't cover.
- simianwords 1y agoYou mean hedged
- thedrexster 1y agoIt can be both! :D
- quickthrowman 1y agoHe would have to report the hedge for the PLTR trade in the same disclosure form, so no he isn’t.
- syassami 1y agoIt's almost as if journalists don't have an incentive to explain this correctly...