George Soros Hedges Portfolio with a Huge Bet Against the S&P 500

From the Businessinsider:

Billionaire George Soros' family office hedge fund, Soros Fund Management, filed its 13F quarterly report with the Securities and Exchange Commission yesterday.

As Marketwatch reporter Barbara Kollmeyer points out, one interesting highlight from Soros' filing is that he bought a bunch of puts on the SPDR S&P 500 ETF in Q2.

It's his biggest holding in the filing.

During the second quarter ended June 30, Soros held 26,157 shares of SPDR S&P 500 and call options on 143,600 shares and put options on 7,802,400 shares in the ETF.

via SEC

In the first quarter ended March 31, Soros held 17,065 shares and puts on 2,618,700 shares of SPDR S&P 500 ETF. 

What's so significant about this move is that puts are used for a downside bet.

It appears that Soros has placed a large bet through S&P 500 puts, basically giving him the right, but not the obligation, to sell them in the future. 

So if the S&P 500, or the ETF which tracks the S&P 500 goes down, Soros will profit handsomely.  

Then again, Soros also bought 66,800 shares of Apple (a major component in the S&P) and he owns a bunch of other stocks.  So buying S&P 500 puts can also act as a hedge. 

Billionaire and market savant George Soros may have indeed hedged his portfolio with a huge bet against the S&P 500 despite having several long positions on many individual stocks.

The action of George Soros reflects on the predicament of investors today. One can hardly take on a purely naked ‘long’ or naked ‘short’ position on the markets.

Being naked 'long' subjects one to the risks of boom-bust cycles from government policies. This I believe represents the Soros- short position

Naked 'short', on the other hand, subjects investors to the anti-shorting policies by governments. Governments has channeled these indirectly through monetary policies (QE and ZIRP) and directly via regulatory bans.

Yes, all these QE-ZIRP stuff have been meant to boost asset prices to keep both the government and their central bank-banking appendages afloat via stealth transfer from society to them or Financial Repression.

So Mr. Soros has long positions in many stocks such as Apple, Google, Johnson and Johnson, JC Penny and etc…

George Soros seems to have emptied his direct gold holdings (signs are that he converted them to physical holdings) but remains heavy on the mines Newmont Mining, Goldcorp and Barrick Gold.

This segment of gold related holdings by MR. Soros reveal of his hedge against government inflationism.

The Soros portfolio exhibits how one should deal with today's highly politicized markets.