Soros Bets $2 Billion on Stock Market Collapse

The legendary hedge fund manager has been raising his negative bet on the Standard & Poor's 500 Index since late last year.

The latest 13-F filing with the Securities and Exchange Commission shows that Soros Fund Management increased its position in “puts” on the SPDR S&P 500 exchange-traded fund by a staggering amount in the second quarter from the first.

The chairman of Soros Fund Management lifted his position to 11.3 million put options on the S&P 500 ETF (SPY), boosting the short position from 2.96 percent to 16.65 percent. The dollar value of the position soared to $2.2 billion from around $299 million. At 16.65 percent, that position is the biggest slice of the Soros firm's portfolio.

Many experts see such a put position as a wager that the price of the stock market (in this case the S&P 500) will tumble.

However, some experts warn that such tactics might be part of some long-term trading strategy.

Given that the reported positions are as of June 30, Soros may have made changes since that time.

Friday, the S&P 500 pared earlier declines in the late afternoon, ending the day little changed at 1,955.06. It earlier fell as much as 0.7 percent. The S&P 500 rose 1.2 percent during the week and ended the week 1.7 percent below its all-time high of 1,987.98, reached July 24.

However, Soros’ fund bought 182 new stocks in the second quarter. Soros also lifted positions in Apple and Facebook in a portfolio loaded up with stocks, "so he can’t possibly be all that gloomy," MarketWatch reported.

Soros nearly doubled his ownership in a U.S. gold-mining companies ETF and initiated new stakes in other gold producers, suggesting the big names in hedge funds continued to have confidence in the yellow metal, Reuters reports.