"Soros Put" Hits Record As Billionaire's Downside Hedge Rises By 154% in Q4 To $1.3 Billion

Tyler Durden's picture

A curious finding emerged in the latest 13F by Soros Fund Management, the family office investment vehicle managing the personal wealth of George Soros.

Actually, two curious findings: the first was that the disclosed Assets Under Management as of December 31, 2013 rose to a record $11.8 billion (this excludes netting and margin, and whatever one-time positions Soros may have gotten an SEC exemption to not disclose: for a recent instance of this, see Greenlight Capital's Micron fiasco, and the subsequent lawsuit of Seeking Alpha which led to the breach of David Einhorn's holdings confidentiality).

The second one is that the "Soros put", a legacy hedge position that the 83-year old has been rolling over every quarter since 2010, just rose to a record $1.3 billion or the notional equivalent of some 7.09 million SPY-equivalent shares. Since this was an increase of 154% Q/Q this has some people concerned that the author of 'reflexivity' and the founder of "open societies" may be anticipating some major market downside.

Then again, as the chart below shows, as a percentage of total AUM, the put position rose to 11.1% of his notional holdings. By way of reference, as of June 30 2013, his SPY put may have had a smaller notional value, but it represented both more shares (7.8 million), and was far greater as a % of AUM, at 13.5%.

Finally, remember that what was disclosed on Friday is a snapshot of Soros' holdings as of 45 days ago. What he may or may not have done with his hedge since then is largely unknown, and since there are no investor letters, there is no way of knowing even on a leaked basis how the billionaire has since positioned for the market.

That said, while the SPY puts are most likely simply a hedge to his overall bullish exposure, perhaps more notable was the $25 million call position that Soros put on the gold miners ETF which has been beaten into oblivion over the past year, in the fourth quarter. Does Soros think that it is finally the miners' turn to shine?

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RaceToTheBottom's picture

How efficient is rolling over those every quarter?  How does one do that without getting killed every quarter?

Real question to those that know option stuff here

deejo's picture

" without getting killed every quarter?"

simple. don't play the market. :-)

 

TruthInSunshine's picture

The "efficiency" is relative for someone like Soros who is always hedged. In other words, he may have ramped up his protection for a downside move, but that doesn't necessarily imply he's necessarily expecting that one is inevitable, but rather, that his proprietary data is suggesting that a significant downside move is more statistically likely in the near term than it was previously (whether his model is spitting out a 10% chance, 35% chance or 85% chance of such a decline - strictly theoretically speaking).

The major takeaway is that something(s) of significance, based on his model, is causing him to increase his protection against losses and/or position him for gains due to a downside move.

I'm not all sofisticated 'n stuff like Mr. Soros, so I is buying me a lottery ticket 'cuz I be feeling real strong winds when I lick my finger 'n stick it in the air.

I'm gonna' git me sum of that potted meat...mmm hmmm.

slaughterer's picture

So, both TruthInSunshine AND Soros go broke by April on bearish positions? Ok.  Yellen likes this. 

TruthInSunshine's picture

I could lose 100% on my puts, and lose more having to cover calls I've written, but even then I'd hardly "go broke," since my investment in this position isn't remotely close to going "full Niederhoffer."

That's not my style: http://gladwell.com/blowing-up/

No risk, no reward, bitches (I threw that in the mix to motivate everyone to remind me of my losses if/when this position gets closed in the red).

Davalicious's picture

Your lottery ticket won't pay off if your counter party blows up or gets off the hook with gubbmint shenanigans.

Soul Glow's picture

Equity has had a nice bounce.  What do you call it when equity bounces after a sharp decline of prices in the face of poor economic readings?  Something about a cat?

Larry Dallas's picture

"Isn't remotely close to going "full Niederhoffer."

Now that is funny!!!

maskone909's picture

Maskone909's proven trading strategy suggests

Dont fuck with leverage, forex, or options.

Cash only slow and steady wins the race.

slotmouth's picture

It probably won't be a big deal to roll them over, but it depends on a number of factors (Are they in the money? When do they expire? etc).  The risk is that the market stays put, or that he underperforms the SPY, neither of which are likely to happen. 

maskone909's picture

But most importantly is liquidity.

In a currency crisis you only own the option to buy stock. I would rather own shares than own options in that situation for reasons of convertibility. Just imho

Chuck Knoblauch's picture

Soros sounds like HE is the market. He controls it and manipulates it, and gets a cut from all the suckers who get squeezed out.

Boston's picture

Since he runs a private family office, why does he have to disclose ANYTHING anymore?

Joe Davola's picture

I think it's because the fund is north of $100Mil

Ignatius's picture

Ban Billionaires

Abi Normal's picture

ROFLMAO, spoken like a true communist...I hope that was sarc, but I don't think so!

Ignatius's picture

Careful who you call a "communist".  I am not.

See the movie The Act of Killing, think about it, and get back to me.

hobopants's picture

Ignatius J. Reilly is no communist! You Dunce!

thamnosma's picture

and the masses continue to believe the democraps are for "the little guy"....

ThirdWorldDude's picture

http://www.washingtontimes.com/news/2012/oct/25/us-economy-on-schedule-t...

 

Put (pun intended) this article into perspective and do the math...

Look up for glitches in the matrix. I'm not saying the controlled demolition is about to commence with the Ides of March, but there already are too many parameters (DeMark's chart overlay, DaClub's net bullish positions on PM's, now Soros) pointing towards it; and stack on no matter what happens.

Godspeed!

SKY85hawk's picture

Hasn't DeMark predicted 3 of the last 0 market crashes?

If his work is so good, name time frames where we coulda made some money, please?

Short or long moves are welcome.

 

TruthInSunshine's picture

a broken clock is correct twice a day, and a really slow one can be correct many more times per day.

Who Laughed's picture

Break the Fed Georgy boy

seek's picture

OT/Bitcoin:

MTGox is implementing withdrawl limits on bitcoin accounts to prevent a bank run -- this means it's almost a certainty that they were implementing fractional reserve banking with the Gox trading evironment (remember, you can't fractional reserve on the blockchain) which is also known as fraud. Can't wait for these guys to be dead and buried.

walküre's picture

But why would Gox do this unless Gox is just following a certain template? Doesn't that raise questions about who is really in charge of this BTC "alternative" currency?

seek's picture

Money/greed, the same reason JPM was charging customers for storage fees on metal they never actually purchased. As long as the trades stayed within the Gox trading system, Gox could allow traders to buy/sell bitcoin without actually having to acquire it, all while getting a percentage of each trade.

Fractional reserves are a huge moneymaker for the banks that run them... until you have a bank run.

This is just one shady exchange, not the whole currency, and no one is in charge.

walküre's picture

Gox was the MF Global of an otherwise clean and efficient BTC market. Got it. Pffffffffft

satoshi411's picture

MF-GLOBAL customers have recourse, they also could sue in USA courts, and they could put CORZINE and political assholes on the hot-seat.

 

The BTC heist has no faces, no borders, ... it will go down as the most publicly orchestrated 'heist' of over $10 Billion USD in history.

 

satoshi411's picture

MT-GOX had withrdrawl limits almost a year ago, $1k a day, or $50k month max.

Meaning that BUYING BTC had no EXIT in any meaningful way.

 

Today the withdrawl limit is ZERO per day, and ZERO per month.

ALL BTC exchanges were always operating as a 'ponzi' meaning they took new money in to cover the redemptions, and now that NO new money is coming in ALL the BTC exchanges are claiming 'system down', while the insiders try to hide what money that remains.

Given that the ID of all exchange and btc mining is mostly 'SECRET' is should easy for all the BTC operatives to dissappear.

 

Make no mistake that ZH was part and parcel of the FRAUD. By their ommission of the truth all along. All along ZH was a cheer-leader for fraud, and now they'll be silent during criminal proceedings.

ncdirtdigger's picture

Smart money stayed away from this ponzi because they knew that you could never redeem bitcon. If you could actually get your money out of bitcon, the opportunities for arbitrage between the various 'exchanges' would have drawn traders like flies to chit.
If you don't hold it, you don't own it.

Chuck Knoblauch's picture

I'd like to buy a derivatives contract on the life expectancy of George Soros. Are there any good bookies out there who can give me odds? How about Maurice Strong?

 

Strong Soros!

One And Only's picture

I heard Soros is still alive only because he gets daily transfusions from the blood of new born babies at the Bohemiam Grove.

dark pools of soros's picture

stealing white southern babies since 1949

walküre's picture

George Soros is accumulating gold at record speed is my prediction. Old money jews know what's best in times of these. Not sure if he ever stopped accumulating. Soros Bank will come as a result of the reset.

noguano's picture

I've been adding when I can.  Physical of course.  And some nice silver.

Motorhead's picture

Soros - Douchebaggus Maximus

JR's picture

What are the two words that signify the loss of America to the tyrants? Answer: George Soros.

This ultimate insider is now dismantling the US Constitution as his mastermind political operative, John Podesta, takes the initiative for this planned tyranny, via the executive order.

Make no mistake, Podesta was brought into the White House to execute the executive order, i.e., the manipulation and use of the executive branch of the government without the benefit of the Constitution, i.e., the separation of powers. This is despotism. 

Podesta, just like Obama, works for the central bankers. And George Soros (aka György Schwartz), the symbol of greed, is a facilitator of this gathering of power into a central location. 

Soros uses his money to manipulate the politicians and the masses. 

Therefore, a fully purchased Congress has no interest in stopping this takeover.

Soros,  the leading moneyman behind the left wing edge of the Democrat Party (MoveOn.org, ACORN and Podesta’s CAPS, etc.), is the international bad boy who engaged in dirty tricks to elect Obama. The way he operates, it’s surprising his passport allows him to travel abroad.

In his book “The Age of Fallibility,”  Soros wrote, “The main obstacle to a stable and just world order is the United States.”  He announced in 2003 that it is necessary to “puncture the bubble of American supremacy.” In the Atlantic Monthly of February 1997, he wrote, “The main enemy of the open society, I believe, is no longer the communist but the capitalist threat.”

Pushing for a world currency, the SDR, and never letting up on the destabilization of the US, USA Today’s immigration beat writer, Alan Gomez, recently outlined how the Soros-funded group, the National Immigration Forum (NIF), has been pushing House Republicans into passage of an Obama amnesty bill, working with the U.S. Chamber of Commerce, Facebook’s Mark Zuckerberg’s FWD.us, and New York City Mayor Michael Bloomberg’s Partnership for a New American Economy.

Amnesty could bring the number of Mexicans in the U.S. to anywhere from 64 to 83 million.

Nationwide, already the number of documented Hispanics in the U.S. has grown to 53 million, or nearly one-half the current population of Mexico -- 115 million as of 2012

In addition, the Center for American Progress (CAP) which is funded heavily by megabillionaire George Soros, in a recent report had 180 staffers and a $27 million budget devoting most of its time promoting the Soros Democrat agenda through blogs, events, publications and the media.  It was CAP that ran Obama’s transition team under its president and founder, John Podesta, former chief of staff to President Bill Clinton.

KeyWiki shows Soros’ connections with the KGB while in Hungary, then his connections with Communism through the years, his felony conviction in France, his work as a former director of CFR, his proclaimed atheism, how he made his money and where he’s putting it, the scandals with his ex-wives and girlfriends... and progresses to his current activities.

KeyWiki, a site that profiles Leftist activists, includes this in its Soros profile:

The Seven Steps of Collapse

Soros is known as the man who broke the Bank of England. The prime minister of Malaysia called Soros an "unscrupulous profiteer." In Thailand, he was branded an "economic war criminal." They also said that he sucks the blood from people.

In 1994, George Soros stated: "Just right, that the former Soviet Empire is now called the Soros Empire."

The following are George Soros' seven steps for bringing down a regime and causing a currency collapse:

  • Step One: Form a shadow government using humanitarian aid as cover.
  • Step Two: Control the airwaves. Fund existing radio and TV outlets and take control over them or start your own outlets.
  • Step Three: Destabilize the state, weaken the government and build an anti-government kind of feeling in the country. You exploit an economic crisis or take advantage of an existing crisis — pressure from the top and the bottom. This will allow you to weaken the government and build anti-government public sentiment.
  • Step Four: Sow unrest.
  • Step Five: Provoke an election crisis. You wait for an election and during the election, you cry voter fraud.
  • Step Six: Take power. You stage massive demonstrations, civil disobedience, sit-ins, general strikes and you encourage activism. You promote voter fraud and tell followers what to do through your radio and television stations. Incitement and violence are conducted at this stage.
  • Step Seven: Outlast your opponent.[15]

George Soros

http://www.keywiki.org/index.php/George_Soros

George Soros - Affiliations

http://keywiki.org/index.php/George_Soros_-_Affiliations

 

walküre's picture

The elite knows this and doesn't give a shit. The elite makes money, you know why? Because they watch what guys like Soros do very carefully and they follow suit. Soros is a master at financial chess. What you're telling us with your list there is nothing new. It's infuriating but so is the fact that the Germans got sucked into two major wars and had to take the blame with all its consequences twice. It pisses me off to no extent but what can I do?

My parents and grandparents could have had a much better position in life but they were robbed of their opportunities because those who control the world will make their decisions for them.

The elite barely shows the hand they're playing before all cards are on the table.Taper has been on the table for a while. End of QE as we know it is on the table. EM currencies collapsing is on the table. China's shadow banking and financial collapse is on the table.

This Soros move is rare and not to be discounted imo.

Who cares what Soros did or does or who the man is? I've never met him, I will never get the chance to meet him and tell him what I think of him. Neither will you! They rule us and unless we go back to square one and roll the dice again, there won't be a change to the status quo. Only option you and I and everyone here has is to follow in their footsteps and try to make hay. Maybe what you do now will benefit one of your own blood in a hundred years.

maskone909's picture

Its not chess when you controll the opponents. This is just a puppet show mixed in with a skim kaper

walküre's picture

Does he alone control the Fed though? Maybe his group does and his moves are more broadcast. The whole group though could be making the same moves. Significant what he does just like Buffet buying the rail road in 2009. Shoulda known.

maskone909's picture

I wish we knew those answers. There is no question he is connected. As for buffet buying the railroads, we are going back to the old school soon imo. This tech bubble 2.0 is about to pop. Got to own real productive boots to the ground type assets

satoshi411's picture

BUFFET destroyed AmeriKKKa

Buffet bought companys in the 1960's-1980's stripped the private pension cash, replaced with IOUs the cash.

Stripped the companys sold off assets and then sold the companys back to the public, rinse and repeat.

BUFFET is an asshole, BECK is an asshole.

The ASSHOLES who destroyed ameriKKKa are very afraid and they want to blame a HUNGARIAN rather than blame ameriKKKan assholes for destroying ameriKKKa.