Bridgewater Bets $1.5 billion on Upcoming Market Drop

[bone]

Ya don't suppose the banks who are clamoring for more liquidity cash in the overnight repo market are buying stocks with it ? Hey: 1.64% cash...

 

[SimpleMeLike]

I am very LONG and STRONG the S&P 500 index.

 

[SimpleMeLike]

Ray Dalio's Bridgewater Associates LP has bet more than $1 billion that stock markets around the world will fall by March. The wager, assembled over the past few months and executed by a handful of Wall Street firms, would pay off for the world’s biggest hedge fund if either the S&P 500 or the Euro Stoxx 50—or both—declines, some of the people said.

It is made up of put options, which are contracts that give investors the right to sell stocks at a specific price, known as a strike, by a certain date. They allow investors to shell out a relatively small amount of cash to hedge a larger portfolio or make a directional wager. The options expire in March and currently represent one of the largest bearish bets against the market.

Bridgewater paid roughly $1.5 billion for the options contracts, or just about 1% of the Westport, Conn., firm’s $150 billion in assets under management, according to people familiar with the matter.

The options contracts are tied to around $100 billion worth of the indexes, said people familiar with the matter. How much the firm stands to potentially make would depend on many factors, including the magnitude of any market decline and the timing of when the firm cashes in its bet.

Baron,

Thanks for the information

What percent in market drop needs to occur for Ray Dalio's Bridgewater to win his bet?

 

[Arnie]

Now why would they want that to be public knowledge?

 

[bone]

They haven't made their strike prices known publicly AFAIK.

Baron,

Thanks for the information

What percent in market drop needs to occur for Ray Dalio's Bridgewater to win his bet?

 

[SimpleMeLike]

They haven't made their strike prices known publicly AFAIK.

Thank you bone for the response.

All I simple person like me can do right now is keeping on buying the market. If the market falls, I worry about that when it falls.

 

[Daal]

Now why would they want that to be public knowledge?

Some folks inside the banks that executed the trade likely leaked this stuff out

 

[bone]

And I think that your response is mature and sensible. You cannot worry about things that are out of your immediate control. If the market price action as you interpret it is bullish you buy. If the market price action as you interpret it is bearish you sell. If you're unsure of yourself - sit on your hands.

Thank you bone for the response.

All I simple person like me can do right now is keeping on buying the market. If the market falls, I worry about that when it falls.

 

[Amahrix]

Thank you bone for the response.

All I simple person like me can do right now is keeping on buying the market. If the market falls, I worry about that when it falls.

You’re so naive, it’s cringeworthy.

 

[Amahrix]

And I think that your response is mature and sensible. You cannot worry about things that are out of your immediate control. If the market price action as you interpret it is bullish you buy. If the market price action as you interpret it is bearish you sell. If you're unsure of yourself - sit on your hands.

It’s not mature and sensible to drive a car without car insurance.

It’s not mature and sensible to buy public markets without a hedge against the collapse of the marketplace.

....the phenomena of domain dependence comes to mind.

One must deploy prudence in ones actions, for instance, we should be maximally unsure as to what the market can give us, if we know nothing, we then know something..... and with that knowledge you can save your ass. get it?