A big investment firm has made waves with a titanic bet against European stocks. It’s worth examining the crosscurrents around the wager, why it might founder, and why it may not be what it seems, Barron's reports.

Bridgewater Associates, the world’s largest hedge fund, has ramped up its short positions in European equities in recent weeks, bringing their total value to an estimated $22bn. The Westport, Connecticut, company, founded by Ray Dalio, has shorted companies that range from German industrial conglomerate Siemens and auto maker Daimler to French oil giant Total and Italian bank Intesa Sanpaolo.