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Article is misleading/wrong on the sizing: > Scion bought roughly $187.6 million in puts on Nvidia and $912 million in puts on Palantir, according to Securitie

by cjbarber 11mo ago

Article is misleading/wrong on the sizing: > Scion bought roughly $187.6 million in puts on Nvidia and $912 million in puts on Palantir, according to Securities and Exchange Commission filings. But 13F reports the market value of the underlying shares for options, not the premium paid for the options All we know is at time of filing he has 10k NVDA puts and 50k PLTR puts. We don't know the strike price or the duration or how much he paid

jb1991 11mo ago
Personally I find the reporting of underlying value more useful than the price paid in puts, since it reflects the asset itself rather than an arbitrary price for an option that could be any of many different strikes or expirations. The option price itself is not that meaningful.
- weird-eye-issue 11mo ago
  > The option price itself is not that meaningful. Except it's literally what determines how much money is at risk in the trade. If you buy puts the actual underlying asset value doesn't matter as much as the value of the option itself (which is based on several factors such as time, strike price, etc)
  - jb1991 11mo ago
    The amount of money that is at risk with options is irrelevant because two different option positions with the same overall cost can have completely different risk profiles, which makes the actual value of those options not so interesting. In the absence of all the other details about the options trades, the actual amount paid for them is without much meaning.
- chollida1 11mo ago
  > Personally I find the reporting of underlying value more useful than the price paid in puts How so? If I buy TSLA puts at a $10 strike or a $500 strike they show up the exact same on the 13F as both have to be reported as if they are delta 1 when showing a share count. One is a very meaningful bet and one is throwing money away.
  - jb1991 11mo ago
    That’s exactly correct, which is why I find the actual option price not so relevant. Presumably that’s why it’s also reported in the way that it is.
    - geor9e 11mo ago
      I find this comment non-sequitur. We may have a mismatched understanding of how options work.
      - jb1991 11mo ago
        More likely, it’s just a misunderstanding of what’s being communicated in this thread. Options are quite complicated and these comments here are rather brief so there’s probably a lot getting lost in the discussion.
- geor9e 11mo ago
  >The option price itself is not that meaningful. It is the most meaningful thing. It's the exact amount of money you are risking. It's the exact amount you lose if it doesn't strike. If I buy a put for $2, the most I can lose is $2. It's meaningful even with no other information. 13F notional value, on the other hand, is meaningless without more info.
  - jb1991 11mo ago
    I disagree quite a bit, and in fact the notional value is exactly what you want to measure this, without more information about the trades. The amount of money that is at risk with options is irrelevant because two different option positions with the same overall cost can have completely different risk profiles, which makes the actual value of those options not so interesting. In the absence of all the other details about the options trades, the actual amount paid for them is without much meaning.
geor9e 11mo ago
I can find extreme Nvidia puts on robinhood for 2 cents right now. So risking ~$2 of actual money gets you ~$20,000 notional 13F value. So the claim "$187.6 million in puts on Nvidia" potentially means "Burry risked a total of $18,760 betting against Nvidia" in reality.
- freebird00 11mo ago
  What do you mean by "potentially means"? I am quiet new to this and the financial jargons don't make sense. I just have a very basic understanding of a few terms. What do you mean essentially? That if everything goes south and nothing happens like Burry predicted then the maximum amount he loses is just $18,760 ? And if that's all that he loses then what's with the big fuss around the news as if it's almost apocalypse incoming with his bets?

jb1991 11mo ago

Personally I find the reporting of underlying value more useful than the price paid in puts, since it reflects the asset itself rather than an arbitrary price for an option that could be any of many different strikes or expirations. The option price itself is not that meaningful.

weird-eye-issue 11mo ago
> The option price itself is not that meaningful. Except it's literally what determines how much money is at risk in the trade. If you buy puts the actual underlying asset value doesn't matter as much as the value of the option itself (which is based on several factors such as time, strike price, etc)
- jb1991 11mo ago
  The amount of money that is at risk with options is irrelevant because two different option positions with the same overall cost can have completely different risk profiles, which makes the actual value of those options not so interesting. In the absence of all the other details about the options trades, the actual amount paid for them is without much meaning.
chollida1 11mo ago
> Personally I find the reporting of underlying value more useful than the price paid in puts How so? If I buy TSLA puts at a $10 strike or a $500 strike they show up the exact same on the 13F as both have to be reported as if they are delta 1 when showing a share count. One is a very meaningful bet and one is throwing money away.
- jb1991 11mo ago
  That’s exactly correct, which is why I find the actual option price not so relevant. Presumably that’s why it’s also reported in the way that it is.
  - geor9e 11mo ago
    I find this comment non-sequitur. We may have a mismatched understanding of how options work.
    - jb1991 11mo ago
      More likely, it’s just a misunderstanding of what’s being communicated in this thread. Options are quite complicated and these comments here are rather brief so there’s probably a lot getting lost in the discussion.
geor9e 11mo ago
>The option price itself is not that meaningful. It is the most meaningful thing. It's the exact amount of money you are risking. It's the exact amount you lose if it doesn't strike. If I buy a put for $2, the most I can lose is $2. It's meaningful even with no other information. 13F notional value, on the other hand, is meaningless without more info.
- jb1991 11mo ago
  I disagree quite a bit, and in fact the notional value is exactly what you want to measure this, without more information about the trades. The amount of money that is at risk with options is irrelevant because two different option positions with the same overall cost can have completely different risk profiles, which makes the actual value of those options not so interesting. In the absence of all the other details about the options trades, the actual amount paid for them is without much meaning.

geor9e 11mo ago

I can find extreme Nvidia puts on robinhood for 2 cents right now. So risking ~$2 of actual money gets you ~$20,000 notional 13F value. So the claim "$187.6 million in puts on Nvidia" potentially means "Burry risked a total of $18,760 betting against Nvidia" in reality.

freebird00 11mo ago
What do you mean by "potentially means"? I am quiet new to this and the financial jargons don't make sense. I just have a very basic understanding of a few terms. What do you mean essentially? That if everything goes south and nothing happens like Burry predicted then the maximum amount he loses is just $18,760 ? And if that's all that he loses then what's with the big fuss around the news as if it's almost apocalypse incoming with his bets?