Soros rumored center of credit-drop bet

Discussion in 'Wall St. News' started by turkeyneck, Aug 10, 2011.

  1. A London newspaper reported a mystery investor might have made $850 million in the futures market by betting the United States credit rating would be downgraded.

    The Daily Mail on Tuesday reported that speculation about the investor's identity centered on George Soros. The left-wing billionaire made more than $1 billion on currency speculation when the British pound left the European Exchange Rate Mechanism in 1992.

    The Mail story followed an ETF Daily News report that an investor had bet on a drop in the U.S. credit rating on July 21 trades of 5,370 10-year Treasury Futures and 3,100 treasury bond futures. Standard & Poor's lowered the credit rating from AAA to AA+ on Friday, prompting a dramatic dip in the stock market.

    Although the Mail acknowledged rumors that Soros might be the investor, the paper cited an unidentified source who said the financier was not involved in the trade and questioned whether the trade occurred.

    Soros, 80, who heads one of the nation's largest hedge fund management firms, Soros Fund Management LLC, could not be reached. A spokesman for the company declined comment.

    In Great Britain, Soros is considered the person largely responsible for the Sept. 16, 1992 "Black Wednesday" -- a day when Soros and other currency speculators forced the British government to withdraw the pound from the exchange-rate mechanism.

    The move cost the Bank of England more than 3 billion pounds.
  2. GOAT trader
  3. zdreg


    what was the supposed trade? please explain which instruments were involved.
  4. In the OP it says "July 21 trades of 5,370 10-year Treasury Futures and 3,100 treasury bond futures."

  5. Hahahaha!!!! Previous poster did not read the full article
  6. rosy2


    so the mystery investor bet on a downgrade and that US rates would go lower? :confused:
  7. joneog


    wait, wasn't this covered already in another thread titled 'armageddon trade' or something like that? I believe those were sells(probably hedges,) looking for a rise in rates.

    So that trade is down big.
  8. no - this is massive on the short side.
  9. zdreg


    exactly my pt. that is why i am asking what was the trade a buy or a sell of what instrument?
    #10     Aug 10, 2011