Highlights
- Michael Burry bought December Nvidia calls with strikes in the mid-to-high $200s, paying single-digit premiums.
- Burry describes the calls purely as a hedge, not a change in his bearish view on Nvidia.
- He's simultaneously expanding short positions in Nvidia, Oracle, Palantir, Nebius, and Caterpillar.
- His short book totals over 21% of his portfolio, not counting separate long-dated Nvidia puts.
- Burry has compared the current AI-driven market to 2005, ahead of the housing crash.
Michael Burry, the investor who famously called the 2008 subprime mortgage crash and popularized in “The Big Short,” has added a new wrinkle to his bearish stance on the AI trade: buying Nvidia call options as a hedge, even as he expands bets against the chipmaker elsewhere in his portfolio. According to a post flagged by Bull Theory and corroborated by Yahoo Finance reporting on Burry's own Substack disclosures, Burry's fund Scion Asset Management bought December-expiry Nvidia calls with strike prices in the mid-to-high $200s, paying only single-digit premiums per contract. Burry described the position explicitly as a hedge rather than a bullish bet, framing it as protection against a sharp upside move in Nvidia shares before his longer-dated bearish positions have time to play out.
A Short Book Growing Even as the Hedge Goes On
The call purchase sits alongside, not in place of, an expanding set of bearish positions. Burry has continued adding to short positions in Nvidia itself, along with Oracle, Palantir, Nebius, and Caterpillar, with his total short-stock exposure now exceeding 21% of his portfolio, a figure that does not include separate put option positions. Those puts, with strikes in the low $100s and expirations stretching from December 2026 into June 2027, represent a much longer time horizon than the December calls, meaning Burry's structure lets him profit from a near-term Nvidia rally through the calls while his puts stay positioned to pay off if the stock falls substantially over the following year. In an August 11 post on his Substack, Burry compared the current AI-driven market environment to 2005, the period immediately preceding the buildup to the 2008 housing crash, arguing that valuations across AI infrastructure names have detached from what current fundamentals can support.
Why the Hedge Structure Matters for Markets
Related: Options Traders Price a $280B Swing Into Nvidia's Earnings
Burry's willingness to hedge a bearish position rather than simply size down reflects a common institutional response to a market that has repeatedly punished short sellers on AI names: even investors convinced of an eventual correction have had to protect against being run over by continued upside in the meantime. The mid-to-high $200s strikes on his December calls sit above Nvidia's trading range at the time of the position, meaning the calls would only pay out on a substantial near-term rally, functioning less as a directional bet and more as tail-risk insurance against being wrong on timing. That a high-profile bear is willing to pay for that insurance, even a token amount via single-digit premiums, is itself a signal that conviction in an imminent AI-driven pullback is not absolute, even among its most vocal proponents.
What to Watch Next
The clearest near-term test of Burry's positioning will be Nvidia's next scheduled earnings report and any post-earnings move relative to his call strikes in the mid-to-high $200s. Markets will also be watching whether other prominent short sellers adopt similar hedged structures, a pattern that, if it spreads, would suggest broader unease about calling a top on AI infrastructure spending even among investors who believe one is coming.
