CNBC – The largest hedge fund in the world has reportedly staked more than $1 billion that global equity markets will fall during the next three months. The wager placed by Ray Dalio’s Bridgewater Associates would pay off for the firm if either the S&P 500 or the Euro Stoxx 50 or both decline, people familiar with the matter told The Wall Street Journal.
The Journal said the bet uses put options — assembled over months by Goldman Sachs and Morgan Stanley — that give investors the option of selling stocks at a predetermined price by a given date. The firm paid about $1.5 billion for the contracts, about 1% of Bridgewater’s $150 billion in total assets under management, the report said.
“Though we won’t comment on our specific positions we do want to make two things clear,” Bridgewater said in a statement to CNBC. “First, the way we manage money is to have many interrelated positions, often to hedge other positions, and these change often, so that it would be a mistake to look at any one position at any one time to try to deduce the motivation behind that position.” “Second, we have no positions that are intended to either hedge or bet on any potential political developments in the U.S.,” the firm added. READ MORE
