Core Insights - The article discusses the concept of shorting stocks and ETFs, highlighting the risks associated with traditional shorting compared to using put options and inverse ETFs [1][2]. Group 1: Shorting and Investment Strategies - Traditional shorting involves borrowing shares and carries unlimited risk, while buying put options limits losses to the initial capital invested [1]. - The use of put options and inverse ETFs is emphasized as a more comfortable tradeoff, providing unlimited upside with limited downside [2]. - Leveraged inverse ETFs can be 2-3 times as volatile, serving as a potential replacement for options in volatile markets [3]. Group 2: Inverse ETFs - Inverse ETFs have been available for nearly 20 years, but a new generation aims to provide short-like exposure to individual stocks [5]. - The article highlights the importance of understanding the underlying stock when considering inverse ETFs, as their performance is closely tied to the stock's movement [6]. - Caution is advised when investing in these new inverse ETFs, as there is a learning curve involved [5].

Company Overview - Planet Fitness operates a large network of fitness centers using a franchise-driven model to expand its presence across multiple countries, focusing on affordable and accessible fitness options supported by a strong brand and scalable business structure [5][8] - The company generates revenue through a mix of franchise fees, corporate-owned store operations, and equipment sales to franchisees, targeting value-oriented fitness consumers in the U.S. and select international markets [8] Financial Performance - As of November 13, 2025, Planet Fitness reported a revenue of $1.29 billion and a net income of $205.80 million for the trailing twelve months (TTM) [3] - The stock price was $107.11, reflecting a one-year price change of 10.62%, which outperformed the S&P 500 by 0.52 percentage points [7] Investment Activity - Yiheng Capital Management, L.P. fully exited its put option position in Planet Fitness, selling 270,000 shares with an estimated trade value of $29,443,500 during the third quarter ending September 30, 2025 [2][6] - The exit from the put option position, which previously constituted 2.65% of the fund's assets under management (AUM), aligns with a broader downsizing strategy as the total fund AUM dropped by 39% quarter-over-quarter [1][7]

Market Volatility & Hedging Strategy - The market exhibits complacency with the VIX around 17%, presenting an opportunity for investors to hedge downside risk relatively inexpensively using out-of-the-money options [2][3] - Buying a 610 put on SPY or 6100 on SPX expiring in August would cost approximately 1% of the portfolio's value, offering significant downside protection [3][6] - Investors can offset the cost of downside protection by selling covered calls, potentially collecting close to 05% of the portfolio's value in the next 30 days [6][7] Trade War Scenarios & Options Plays - In a scenario where the EU and India don't make a deal and retaliate with tariffs, buying out-of-the-money put options is a simple way to hedge against this worst-case scenario [4][5] - If the trade deal deadline is extended, investors can roll out their options to September, continuously harvesting premium by selling upside calls and using the proceeds to buy downside put protection [8][9][10] - If countries capitulate and make a deal, the market is likely to react positively, and investors could consider selling downside puts and using the proceeds to fund buying upside calls for upside participation [11][12][13]

Core Insights - Michael Burry, known for his successful bet against the housing market during the Great Recession, has sold nearly all stocks in his fund Scion Asset Management and purchased put options, indicating a potential bearish outlook [2][6][10] Group 1: Burry's Investment Strategy - Burry typically maintains a small portfolio, holding around a dozen stocks, and has recently sold large positions in Chinese companies like Alibaba and JD.Com while also buying put options on these stocks [3][9] - The decision to sell coincided with rising trade tensions between the U.S. and China, suggesting Burry anticipated a market downturn due to tariffs [6][11] - Burry's remaining long position is in Estée Lauder, which has seen a significant decline, and he doubled his investment in the company during the first quarter [9][10] Group 2: Market Context and Reactions - The market experienced a sharp decline in early April, falling nearly 20% from February highs, which aligns with Burry's timing of selling stocks [6][10] - Nvidia, a company heavily impacted by trade tensions and export restrictions, saw its stock price drop significantly but has since recovered following a pause in tariff increases [7][8] - Burry's past behavior indicates he may be short-term bearish while potentially preparing to buy back into the market after a dip, as seen in previous trading patterns [10][11]