Could someone explain this trade to me in layman’s terms? Short bonds, sell OTM puts? “Pershing Square made its bet with options, taking a notional short position principally in shorter-dated maturities of U.S. Treasuries, as well as some longer ten-year dated debt, Ackman said. “We were able to set up a bet like that on an out-of-the-money basis very, very cheaply — very much like credit default swaps; but in this case, not swaps but options,” he explained.“ https://www.institutionalinvestor.com/article/b1vl6gf18v9f5v/Bill-Ackman-s-1-Billion-Inflation-Bet
Short bonds because if you have inflation at some point the CB is going to have to raise rates => bonds go down. Sell OTM puts because markets don't go down.
I assume he sold puts on bonds so that if they go down, he just takes assignment at those levels. I think it’s same kind of trade Buffet did with stock indices when they crashed, except he didn’t short.