Michael Burry, the guy who called the subprime meltdown in ’08 and made a fortune betting against the system, just closed up shop at Scion Asset Management.

One day he was shorting the most hyped AI names in the market…and the next day he was done. 

Apparently, the hedge fund’s de-listing happened on Monday, according to a much-discussed SEC filing. 

Now, traders are trying to spin Burry’s actions in every direction. 

Inquiring minds want to know: 

A) Was he wrong on the trade?
B) Did he lose his conviction?
C) Or did the guy behind the “Big Short” see something much deeper coming?

I’m inclined to go with Option A.

I think Burry was early, maybe even flat-out wrong — at least on timing.

In a market where hype keeps winning, being right eventually doesn’t pay the bills.

That’s the risk when you step in front of a freight train like AI mania with size.

People like Burry don’t lack conviction, they just know when a trade stops making sense. If the cost of holding is too high, you cut and move on.

And maybe that’s all this was.

Still, you don’t see a high-profile exit like that without asking bigger questions.

Because it’s not just Burry’s quiet departure that’s turning heads…

We’ve got the longest government shutdown in U.S. history now technically over, except the funding President Trump OK’d late Wednesday only runs through January 30.

Meanwhile, half the economic data that fuels Wall Street’s algos isn’t even available. 

CPI inflation data? Delayed again. October jobs report? Might never see the light of day.

So now the Fed is flying at least half-blind — and the market’s pretending like everything’s normal.

That’s a setup.

If you know how to trade options, this kind of broken environment can hand you serious opportunities.

Time to talk some strategy.

Welcome to The Twilight Zone

Let’s go back to Michael Burry for a second.

He didn’t just close Scion because he got smoked on Nvidia or Palantir. He had large puts on both as recently as Q3. 

No, he saw the same madness we’ve all seen — AI stocks priced like they’re going to solve death and replace every human on the payroll.

But sometimes, even the best thesis gets steamrolled.

AI’s still hot, while yields dropped a bit and tech caught a bounce. And if you’re sitting on options bleeding theta, there’s a moment where you just decide: “Forget it. Not worth it.”

Especially when the macro picture looks like this.

No CPI inflation, no jobs data, zero clarity. How is the Fed supposed to keep making policy decisions?

It’s like trying to land a plane with no radar, no instruments, and nothing but clouds.

Now imagine you’re a quant or a macro fund manager who has models that need clean inputs. 

What do you do when the inputs stop coming?

You reduce risk and scale out. Maybe you shut down for a while — just like Michael Burry.

Who’s the Smart Guy?

This is where retail traders actually have an edge.

In this environment, big funds are handcuffed because they can’t act on instinct and they can’t trade off the tape. 

They need clean signals. 

Meanwhile, volatility is creeping up, option premiums are shifting, and sentiment is cracked.

That’s when you step in.

When emotion starts driving price, options traders get chances you don’t see in calm markets.

Directional moves get sharper. IV gets mispriced. 

The market becomes more about reactions than reality.

Here’s how I’m playing it:

• Tight spreads in high-IV names: Looking for names where the story’s still red hot but the chart is flashing warnings.
• Short-term directional bets with limited risk: Focused on tech that’s overbought and over-loved. Burry might’ve been early — but he’s not crazy.
• Using the data blackout to my advantage: When the machines don’t have inputs, I don’t need to outthink them. I just need to find the fear.

This isn’t about being smarter than a guy like Burry. It’s about staying nimble while the institutions are frozen.

And while they scramble to rebuild their models, I’m trading the setups right in front of me.

So … here’s to keeping it simple, staying sharp, and finding edge where others hesitate.

Cheers,
Jeff Zananiri