Bill Ackman's latest short is a 'smart lottery ticket' bet against the Hong Kong dollar – here are 7 of his biggest trades

The Hong Kong dollar is pegged against the US dollar.

The billionaire investor said they have a large notional short position against the Hong Kong dollar. It's only a matter of time before the peg breaks for Hong Kong.

The Federal Reserve's aggressive interest-rate increases this year have put pressure on Hong Kong's peg to the US dollar, which has been between 8.25 and 7.85 for nearly four decades. A put option is a contract that gives the holder the right to sell an asset at a certain price.

The peg to the dollar is maintained by the finance ministry. There's a growing case for it to abandon that strategy as China deals with a debt crisis in its property sector.

Veteran trader Boaz Weinstein praised Ackman's latest short as a 200 to-1 smart lottery ticket, but others said that it's unlikely his bet against the Hong Kong dollar will pay off.

SEB's chief emerging markets strategist told Insider that he agrees with Ackman's point that Hong Kong's economy is suffering from slow growth at a time when the dollar is surging. I don't believe the peg will break at this point.

Ackman has racked up some outsized wins and troubling losses over the course of his 30 year career.

The investor's biggest trades are listed here.