Burry cut his position in an AI-boom beneficiary by 75%. What other trades did he disclose?

Investor Michael Burry, who made his fortune during the U.S. mortgage crisis and served as the inspiration for a character in the movie *The Big Short*, announced on November 6 that he had sold a portion of his put options on shares of industrial equipment manufacturer Caterpillar. The company is considered one of the beneficiaries of the AI boom due to demand for generators for data centers.

Put options grant the right to sell an asset at a predetermined price and are used as a hedge against a drop in price. According to Burry, he reduced his position by 75% after it had risen approximately fourfold.

"The market value of the position is now roughly the same in dollars as it was at the end of the second quarter, when I opened it," Burry wrote on his blog, Cassandra Unchained.

Just the day before, Burry had said he intended to hold onto his existing call options on Caterpillar stock. At that time, he also discussed several trades.

— He reduced his position in put options on the VanEck Semiconductor ETF—which includes shares of the world’s leading semiconductor companies—by 25%.

— At the same time, Burry stated that he intends to hold onto the remaining put options on this fund, as well as his existing put options on shares not only of Caterpillar, but also of Palantir and Oracle, as well as the Invesco QQQ Trust exchange-traded fund, which tracks the Nasdaq 100 index, and “others” (without specifying exactly what he meant).

— He also increased his stake in MercadoLibre, the “Latin American Amazon.” On November 4, the company disappointed analysts with its third-quarter earnings report, but Burry disagrees with them. “Every time I study this company, I’m surprised by what all the other analysts see. Virtually all of MercadoLibre’s moves seem logical to me and don’t raise any concerns,” he wrote.

On Thursday, November 5, the U.S. stock market was rocked by a record-breaking sell-off: The Nasdaq Composite Index plummeted 5.5%, entering correction territory—it had fallen more than 10% from its most recent record high. The index lost approximately $2.5 trillion in market value. The VIX, Wall Street’s “fear index,” posted its largest single-day gain since 2018.

The next day, Friday, the Nasdaq Composite and the S&P 500 broad-market index recouped some of their losses: the former gained 0.3%, and the latter 1.1%. However, both still ended the week in the red.

This article was AI-translated and verified by a human editor