'Big Short' Michael Burry's bets against S&P 500 and Nasdaq pay off

• "Big Short" investor Michael Burry's bearish stock bets earlier are paying off.
• In the second quarter, his management fund Scion held put options on ETFs that track the S&P 500 and Nasdaq.

Michael Burry's bearish equity bets earlier this year have proven correct as the S&P 500 and Nasdaq have sold off sharply.

His spot-on bets against subprime mortgages were portrayed in "The Big Short" and earned him a massive investor following.

On Friday, the S&P 500 entered correction territory, joining the Nasdaq after it made a similar move earlier this week.

By the end of the second quarter, his management fund Scion held put options on two exchange-traded funds — SPDR S&P 500 and Invesco QQQ — that track the major index funds.

Since then, the S&P 500 has fallen about 8%, and the Nasdaq has tumbled 9%.

Burry regularly rings the alarm on stocks. In recent years, the Scion chief has warned of a massive bubble, and once suggested that the S&P 500 would bottom out at around 1,900 points.

But he recently admitted to making a mistake this year. In late January, Burry tweeted the word "sell," ahead of a bull-market run.

Correction: October 27, 2023 — An earlier version of this story was based on tweets that aren't affiliated with Burry and references to them have been removed.