Michael Burry just disclosed he bought $NVDA calls to hedge his longer-term short position. Even the Big Short guy thinks we're due for a bounce after 4 straight red earnings reactions.
This is wild. Burry's still bearish long-term but he's covering near-term risk with calls. Translation: he thinks the setup is oversold enough for a technical relief rally, even if he doesn't believe in the story structurally.
4 red ER reactions in a row is extreme. That kind of selling exhaustion often sets up mean reversion trades. Burry's hedging because he knows markets don't move in straight lines—even when the thesis is bearish, you respect the technicals.
If you're short $NVDA or sitting on puts, this is a signal to take some off or at least hedge. If you're long, this could be your window. But remember: Burry's base case is still bearish. He's just not fighting the tape on a potential short-term squeeze.
Fascinating risk management. Sometimes the best trade is the one that protects you from being right too early.
This is wild. Burry's still bearish long-term but he's covering near-term risk with calls. Translation: he thinks the setup is oversold enough for a technical relief rally, even if he doesn't believe in the story structurally.
4 red ER reactions in a row is extreme. That kind of selling exhaustion often sets up mean reversion trades. Burry's hedging because he knows markets don't move in straight lines—even when the thesis is bearish, you respect the technicals.
If you're short $NVDA or sitting on puts, this is a signal to take some off or at least hedge. If you're long, this could be your window. But remember: Burry's base case is still bearish. He's just not fighting the tape on a potential short-term squeeze.
Fascinating risk management. Sometimes the best trade is the one that protects you from being right too early.