While over the past week more attention has been paid to the George Soros Open Society leaks than to the latest 13F filed by Soros Fund Management, the family office of the Hungarian billionaire, it is worth recalling that earlier this week we showed that confirming Soros’ latest bearish turn, the hedge fund had loaded up on enough S&P puts to bring its total holdings as % of AUM to just shy of all time highs.
However, a more interesting 13F filing which largely slipped between the cracks over the past week, was that of Tudor Investment Corp, the hedge fund belonging to Paul Tudor Jones, the “legendary macro trader” as defined by Bloomberg, which as we reported two days ago had fired 15% of its employees, and which is now said to be implementing minimum risk levels and urging its traders to take on much more risk to stem the losses.
It was interesting, because it revealed that Paul Tudor Jones is even more bearish than George Soros (and perhaps even of Carl Icahn), based on the surge in the fund’s S&P puts, which rose from $490 million notional to $1.7 billion notional, a nearly four-fold increase, and making it the biggest such position in the fund’s history, dwarfing the $301 million in notional calls the fund had on at the same time. This was the biggest delta between Tudor’s puts and calls on record.
In fact, as of this moment, PTJ’s gross put exposure amounts to 37% of his entire disclosed long equity exposure of just over $4.7 billion.
The chart below shows the dramatic increase in Tudor Investment Corp SPY puts…
… relative to the reported long equity exposure as per the fund’s monthly 13F filings.
Considering his performance, and the $2.1 billion in redemptions already in the public domain, it won’t come as a surprise that PTJ is also hurting. However, considering the surge in bearish sentiment, it appears that the reason for this hurt is that yet another billionaire decided that the market was far too frothy and was actively hedging (and likely shorting, although those positions are not revealed in 13F filings), only for central banks to rip it even higher courtesy of the now record $200 billion in monthly QE, the result of which is that yet another trading legend may soon be crushed.
Those curious if PTJ will keep his massive S&P put position – just as Carl Icahn has confident that he will win this particular war with the central banks – or if instead he will unwind it, will have to wait until mid-November when the fund’s Q3 13F is released.
Source: 13F
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