The world's largest hedge fund has taken $ 1 billion positions against global stock markets that will collapse in the next three months.
The Ray Dalio Fund, Bridgewater Associates is the biggest bet on the S & P500 and Euro Stoxx 50.
Positions have been built through Put options for months through Goldman Sachs and Morgan Stanley. The fund paid $ 1.5 billion for options, which is about 1% of Bridgewater's entire portfolio.
The fund only reveals that the positions themselves are not found as a hedge against potential political events in the US, but as part of a hedge against other positions that are constantly changing over time as part of the management of funds.
Dalio's actions are triggered by a moment in which we have some positive developments around the negotiations, with both parties repeatedly saying that they are close to a deal. However, with each passing day of lack of official news, doubts are beginning to emerge that there will be a deal at all. Especially after US enactment of a law to support protesters in Hong Kong.
At the same time, the bond market seems to have already fully appreciated the prospects for a deal. The strong rise in yields in October continues to adjust this month.
Dalio is increasingly pessimistic about his future relationship between Washington and Beijing.
"There is currently a trade war, a technological war, a geopolitical war. The development of these wars will determine our future," says Ray Dalio.
In his last statement, however, Dalio denies his fund has taken such a course.
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