(Reuters) - William Ackman said on Wednesday he has bought options to sell shares of Herbalife Ltd HLF.N as a new way to bet against the nutritional supplement company he has described as a pyramid scheme.

FILE PHOTO: William 'Bill' Ackman, CEO and Portfolio Manager of Pershing Square Capital Management, speaks during the Sohn Investment Conference in New York City, U.S., May 8, 2017. REUTERS/Brendan McDermid

The activist investor took a $1 billion bet in 2012 that Herbalife’s shares would fall by selling loaned shares which he hoped to buy back cheaper at a later date.

Herbalife’s shares have instead risen since then, partly due to the company aggressively buying back its own stock. On Wednesday Ackman said that the short stock position has been closed. Usually closing out a short position when a stock price has climbed signals that an investor has taken a loss.

The move to options caps potential losses he might incur in the future.

“We converted the short stock position and replaced it with outright put positions,” Ackman told Reuters.

Ackman is sticking with his negative view on the company but seeking to limit the potential losses for his fund’s investors if he had held onto the short stock position.

Ackman said that potential losses on Herbalife will now be limited to 3 percent of the firm’s capital. “We can still lose money but the loss is capped,” he said.

For years, Ackman has said that the company would eventually crumble under regulatory scrutiny for operating what he has called a pyramid scheme, a claim Herbalife denies.

Herbalife’s stock price has soared some 50 percent this year and the company has been buying back shares, piling pressure on Ackman’s $10 billion hedge fund as the cost to borrow the shares rose.

Short positions, in which borrowed shares are sold in hopes they can be replaced later at a lower price, have the potential for heavy losses that increase as a stock’s price rises. Put options give the holder the option to sell a stock at a set price.

Analysts called it a savvy move and a more aggressive bet against Herbalife’s future by limiting losses for his fund and opening the potential for larger returns.

Herbalife’s stock price has risen in part by its decision to buy back a big chunk of its shares, a move many in the market interpreted as Herbalife trying to pressure Ackman into giving up on his years-long crusade against the company.

Herbalife stock dipped 1.7 percent to $71.37 on Wednesday.

Pershing Square International, the firm’s hedge fund portfolio, nursed small losses for the year through the middle of October after logging double-digit losses in 2015 and 2016.

The fund reported a 1.5 percent loss for the first six months of 2017. Pershing Square said in its interim financial report that Herbalife was the fund’s biggest loser for that period with a 4.3 percent decline.

For much of the last five years, since Ackman first unveiled the position in December 2012, Herbalife has been a thorn for Pershing Square as unrealized losses mounted.

While Herbalife has played a major role in Ackman's portfolio in recent years, Ackman quickly turned back to Automatic Data Processing Inc ADP.O where he is campaigning for three board seats. He hosted another webinar on ADP on Wednesday, aiming to underscore his claim that the company is inefficient.