George Soros has nearly doubled his negative bet on the S&P 500, tallying nearly 4 million put options of exposure as of the end of March, regulatory disclosures show. But don’t let the bearish stance in an individual exposure fool you. Soros might not be betting on the apocalypse as much as fine tuning market environment-based modeling allocations.

Also see top hedge fund letters and our 13F summary

As you can see from the screenshot below this issue comes up literally every single quarter after Soros files his 13f and we are not mocking or making fun of any of the outlets mentioned.

George Soros
Image source: Bloomberg Video Screenshot

The exact motivations of George Soros are officially unkown

The exact motivation of George Soros with respect to nearly doubling his bet against the S&P 500 stock index is officially unknown.

The Soros family office, with nearly $25 billion under management, doubled exposure to the SPDR S&P 500 ETF, purchasing nearly an additional 2 million “put” shares to bring his total exposure to 4 million, the Monday release of the fund’s 13F regulatory filing revealed. This makes the SPX exposure his largest in the portfolio based on notional value.

Since March 31, when the family office owned 2.1 million put options, the S&P 500 has risen steadily from near 2060 to now trade at 2184, for nearly a 124-point move higher in the underlying index. A put option typically increases in value when the price of the underlying asset moves lower and sees increases in price volatility.  As the price of an underlying asset moves higher, however, the value of a put option is reduced based on how far from the money the put option was purchased and the time to expiration.

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If Soros were betting on bust he might not reduce gold exposure by this much

Soros has previously expressed concern over central bank policies and the uneven targeting of quantitative easing.

Don’t think that by doubling his short S&P 500 exposure Soros is betting on a total market failure, however.

The family office “sharply” cut its exposure to gold, the Wall Street Journal noted. They sold the majority of shares in Barrick Gold. On March 31 the stock’s price was near $13 and today it is trading above $21.

Although it has no practical industrial application, Gold is typically considered a safe haven asset, one used as a hedge against crisis. Soros not only reduced exposure to Barrick, but also reduced exposure to a gold-backed ETF and sold off a stake in miner Silver Wheaton.

If Soros were betting on bust, these assets might not have been reduced to such an extent.

Soros lightens up on China, buys bankrupt oil concern in bankruptcy

Soros also continued to lighten up in China, a region where he has a pointed opinion.

Soros is the only known human being to take on a central bank and win the fight, famously “breaking the Bank of England” in 1992 by betting against the sterling currency. When one looks at his thoughts towards China, they don’t seem as aggressive.

While Soros was part of the story, he did not have as an aggressive position as other fund managers when China warned him to stay away from their currency. Rather than actively betting against China, the regulatory disclosures reveal the 86-year-old fund manager appears to be lighting up positions.

The fund also sold off a position in Schlumberger, the world’s largest oil-services company, but then added a new 2 million share exposure to bankrupt oil-field servicer C&J Energy Services, perhaps a buy on a drawdown play. When a firm is in bankruptcy the risk management trigger has a floor of zero.

Soros also has a large stake in John Malone’s Liberty Broadband, its second most valuable holding behind the short S&P 500 exposure. The cable industry is rapidly changing as the relative monopoly of providing high-speed Internet access to the home is being challenged by the likes of Google as well as various municipalities, who are beginning to offer WI-FI to their residents.

Michael Vachon, a spokesperson for Soros, did not respond to requests for comment.