Ackman says his fund has restructured Herbalife position

Nov 1 (Reuters) - Billionaire investor William Ackman, who has been betting for five years that Herbalife Ltd's stock price would tumble to zero, said on Wednesday that his firm recently restructured its position in the nutrition and supplements maker.

The restructuring removes some of the pressure on Ackman's $10 billion hedge fund Pershing Square Capital Management after Herbalife's share price climbed roughly 50 percent this year.

"We covered the shorts and replaced them with outright put positions," Ackman told Reuters, adding that his firm's potential losses on Herbalife will now be capped at 3 percent of the firm's capital. "We can still lose money but the loss is capped."

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 long as a stock's price rises. Put options give the holder the option to sell a stock at a set price.

Herbalife's stock price has been pushed higher in part by the company's decision to buy back a big chunk of its shares, a move many in the market interpreted as trying to pressure Ackmaninto giving up on his years-long crusade to bring down the company.

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

Ackman has been betting the stock would crumble under regulatory scrutiny for what he has called a pyramid scheme. Herbalife has denied that claim.

(Reporting by Svea Herbst-Bayliss in Boston; Editing by Chizu Nomiyama and Meredith Mazzilli)