Big Short's Michael Burry Buys NVIDIA Call Options, Says They're Merely a Hedge for Short Positions
Nashnova编辑部
Michael Burry, a persistent Nvidia bear, made a rare purchase of call options on the stock ahead of earnings — but stressed this is a hedge, not a bullish pivot. His short positions now exceed 21% of his portfolio, and the calls are essentially an insurance policy.
Why would a committed bear buy call options?
Burry purchased December-expiry Nvidia calls with strikes in the mid-to-high $200 range, sized at roughly 3.5%–4% of his portfolio.
He was blunt: the premium is "fully offset by his short positions," and he would not have made the trade without his large short and put-option book.
In plain terms = this is not a bullish bet. It is insurance — if Nvidia surges post-earnings, the calls cap part of the damage to his shorts.
How large is his short book?
Burry has been adding to shorts in Nvidia, Oracle, Palantir, Nebius, and Caterpillar. Short stock positions alone — excluding puts — now top 21% of the portfolio.
This means → he is not hedging around the edges. More than a fifth of his capital is riding on these names falling.
He acknowledges using similar pre-earnings hedges in the past, but admits his "track record has not been stellar."
How has his portfolio performed this year?
The short side is under pressure: Nvidia is up over 12% year-to-date, and Nebius has surged more than 150%.
The long side is struggling too: his long Palantir is down nearly 5%, and Oracle has dropped over 23%.
This reflects an uncomfortable reality — both legs of Burry's long-short book are losing money this year. The market has not cooperated.
What is his core bear case on Nvidia?
The central thesis: Nvidia's monopoly position will prove shorter-lived than the market expects, and margins will compress accordingly.
He argues the company "will not return enough capital to shareholders" — cash will flow instead to capex and diversification. In plain terms = the profits go back into expansion, not into investors' pockets.
Burry draws a comparison between Nvidia's AI expansion and the 2001 Enron scandal, warning the potential harm is "orders of magnitude greater." He sees systemic overvaluation risk in the current AI infrastructure spending boom.
What is he buying on the long side?
He added to Birkenstock at a mid-$30s price, calling it a full position.
He added to Freddie Mac at a mid-$5s price and holds a large position in Fannie Mae.
This means → Burry's longs concentrate in a consumer brand and policy-driven mortgage agencies — a sharp contrast to his tech shorts. The implicit bet: money will rotate out of a tech bubble and into tangible value.
What will this hedge ultimately prove?
Nvidia's earnings are imminent. Burry himself calls the outcome "a coin flip" and notes the stock's recent post-earnings pattern has skewed negative.
If Nvidia rallies post-earnings, the calls pay off but the short book bleeds — the hedge works locally, but the overall position still loses.
If Nvidia drops, the shorts profit and the calls expire worthless — the premium is simply a known insurance cost. This is a textbook risk-management trade, not a directional bet.
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