The options market reveals doubts about the sustainability of the rise of Chinese stocks

Despite the rise of the Chinese shares traded for the fourth month in a row on the Hong Kong Stock Exchange, the bets in the derivative market show the suspicion of investors over the market. The ‘Hanging Singh for Chinese Company’ index rose 23% of the lowest level in April, and the average implicit fluctuations recorded its lowest monthly levels in four years. But compared to actual fluctuations, the indicator looks high. This means that the derivatives are still expensive and that it is increasingly reluctant to buy contracts that bet on climb without hedging, according to strategic analysts, Jason Louie and Sarlett Liu of BNP Paribas. China’s shares were one of the best performances listed in China’s most important justice, among the best global achievement in August thanks to the abundant liquidity investors who pumped money into it. But data shows the constant weakness of the economy, which exacerbates the fear of the sustainability of profits, which led to a slowdown in the rise of the Chinese enterprise index. “Many traders probably took major centers in July, during which they paid high bonuses for implicit fluctuations to increase the fluctuations, in an attempt to level the results of the end of US Customs duties in August,” according to Han Pio Liu, director of the funds in “Maitri Asset Management”, which is a family office. “Once the deadline is over without a noticeable escalation, these centers were closed with levels of implicitly implicit fluctuation, amid expectations of the decline in implicit fluctuations in the future,” he added. The decrease in the fluctuations index is near the ‘Hanging Singh index for Chinese businesses’, from the lowest level since September. On the other hand, the index reached a high level last year when customers rushed to form centers in anticipation of more profits with the rise of shares with optimism about Chinese government incentives. In the United States, the optimism of investors has increased slightly over the traded indicators that follow the shares. The options contracting bonus that has been on the rise for three months, compared to the contracts that bet on the decline, was returned to the pre-sales levels raised by customs duties in April for traded boxes such as “Ishares China Large-CP ETF” and “China-Cineshares” CSI Internet Fund). The two boxes have large components similar to the Chinese enterprise index. Some traders prepare them for the end of the commercial ceasefire. One of the investors recently sold purchase contracts at a price of $ 40 at the end of September, equivalent to 10 million shares from the “FXI” fund, to buy the same amount of contracts for November between $ 41 and $ 45. In general, implicit fluctuations generally decreased on these funds, which indicates a poor interest in following up the wave of Ascension. The shareholders associated with shares at Bank of America Corp have indicated that they were ‘rarely’ that they saw that they decades on the ‘FTSE China A50’ index on these cheap levels. With a view to protection, they recommended that transactions such as “sales contracts” that are hardly set as a cost if the profits continue, while investors who want to increase their exposure to the market can study the strategies of the price differences of purchase contracts.