Scion did not pay $10,000,000 for the credit default swap; that was only its notional value.

Judged as of 2025, when the statement was made, about the credit default swap(s) under discussion (Scion's mid-2000s mortgage-backed CDS). True: the contract documents, Scion investor letters or reliable accounts (for example trade confirmations, or reporting based on Scion's records) show that the $10,000,000 was the notional amount of the swap and that Scion paid only periodic premiums or an upfront amount that was a small fraction of it, not $10,000,000. Mostly true: the core point holds, but a minor detail is off, for example the notional for that trade was a somewhat different round figure, or Scion also posted some collateral or margin that the statement does not mention. Mixed: Scion did not pay the full notional, but its premiums plus posted collateral came to a large share of it, so 'didn't actually pay' is only partly accurate. Mostly false: Scion's cash outlay for that position was close to or about equal to $10,000,000 under some other label, for example fully funded collateral. False: the records show Scion actually paid $10,000,000, for example because the position was a funded instrument rather than an unfunded swap.

Set before the research began.

1. E1 Michael Burry Big Short: Scion's Subprime Bet | Investing With Purpose Investing With Purpose · 19 June 2026

   “The path there was brutal. For nearly two years the position produced only mark-to-market losses while Burry paid out premiums, reportedly around $100 million in total over the life of the trade.”

2. E2 Michael Burry Big Short: Scion's Subprime Bet | Investing With Purpose Investing With Purpose · 19 June 2026

   “Burry's FCIC testimony describes premiums in the range of roughly 85 to 275 basis points a year on the tranches he targeted, a small cost relative to the full value of the bond.”

3. E3 Scion Capital's 2006 Letter to Shareholders GuruFocus · 30 December 2015 Own record

   “For instance, if only 50% of the PPSI 2005-WLL1 M9 tranche is written down in the first month, the owner of $10,000,000 in protection would collect $5,000,000 and would not need to forfeit the contract to do so.”

Scion's own 2006 shareholder letter (E4) describes "$10,000,000 in protection," which is a notional amount: the holder collects a share of it when the tranche is written down, not a sum it paid. An independent secondary account (E3) cites Burry's FCIC testimony for annual premiums of roughly 85 to 275 basis points, which it calls a small cost relative to the full value of the bond. E2 likewise says Burry paid ongoing premiums over the life of the trade. Together, the sources show that Scion paid periodic premiums that were a small fraction of the notional, not $10,000,000. None of the sources mentions collateral postings.