The phrase “don’t try this at home” was possible for moments like this.
Bond King and Pacific Investment Management co-founder Bill Gross said he won $ 10 million in the absence of GameStop GME.
stock during the retail frenzy for stocks earlier this year, but not before the retired billionaire lost several million dollars.
He explained to Bloomberg Television in an interview on Tuesday how trade fell. “I came in too early. I came in with options like a good Robin Hood trader, I think … and I sold calls for around $ 150, $ 200, ”said Gross, who added that shares had risen to $ 400.
“I managed to overcome my insecurities and manage to get to the end,” said Gross. “I was in the pit for about $ 10 million, but I’m about the same as on the ground.”
A call option is a financial instrument that gives the holder the right, but not the obligation, to buy a basic security at a set price, known as the strike price, which means that Gross would have been obliged to buy the shares. at a higher price than it sold when the option was exercised.
Gross said he still returned to GameStop shares and still sells call options at $ 250 and $ 300 per share. If those actions exceed these levels, the billionaire could find himself losing money again. “Volatility is very high and that promotes the ability to make some money,” he said.
Indeed, GameStop shares have been the target of short sellers this year, partly battling individual investors organized by Reddit’s WallStreetBets crowds. The drama triggered an investigation in Congress, which continues Wednesday, regarding the short pressure of GameStop, AMC Entertainment AMC,
and other actions.
Read: GameStop Round 2? The way an option buying frenzy offers another shake-up of meme stocks
GameStop shares started the year at $ 18, rising to over $ 300 at the end of January, at the height of the frenzy, falling to $ 40, then more recently back to $ 200. Shares rose by more than 1,000% from last year, but lost 21% this week alone.
Gross retired from the post-PIMCO concert as portfolio manager at Janus Henderson in 2019 and is now focusing on managing his charity.
While leading the world’s largest bond fund, Gross also told Bloomberg that he is betting against US Treasury bonds, saying he expects inflation not to fall below 2% in the coming months, but to be more than 3 percent. % at 4%. Yield for 10-year Treasurys TMUBMUSD10Y,
they have risen to unseen levels in more than a year as investors expect strong economic reopenings in the US, fueled by vaccines.
Chimes’ gross inflation with analysts saying part of the inflation rise this year will be due to so-called base effects, when weaker months of inflation have been phased out of annual measures as it has passed. time, which led to higher mechanical price levels.
This phenomenon will take effect in the next few months, when the deflationary blow from last year’s coronavirus pandemic is eliminated from the annual inflation measures reported by the US Department of Labor.
Sunny Oh contributed to this report.