ray dalio

Ray Dalio’s hedge fund has placed a bet north of $1 billion that global stocks will fall by March, according to a report from the Wall Street Journal.
The position is made up of put options that could pay out to Bridgewater Associates if the S&P 500 Index, Euro Stoxx 50, or both drop in value, the WSJ found.
Put options are contracts that grant investors the right to sell stocks at a predetermined price by a specific date.
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Ray Dalio’s hedge fund has placed a wager of more than $1 billion that stocks around the world will decline by March, according to a Wall Street Journal report citing people familiar with the matter.

Bridgewater Associates has built up a position of put options with the help of banks such as Goldman Sachs and Morgan Stanley that could generate returns if the S&P 500, Euro Stoxx 50 — or both — fall during the period, the WSJ found.

Put options are contracts that grant investors the right to sell stocks at a predetermined price by a specific date.

According to the report, Bridgewater’s put options will expire in March 2020 and the firm shelled out about $1.5 billion for the contracts, which are linked to about $100 billion worth of the two stock indexes.

Its unclear why Bridgewater built up the position, the WSJ reported, citing multiple clients that said it could be the firm hedging against its exposure to the equity market.

The magnitude of the bet has raised the price of some options, the WSJ found. The amount of S&P 500 put options outstanding has also increased to a four-year high, according to data from Trade Alert cited by the WSJ.

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Source:: Business Insider

      

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