Options traders are careful of Trump treat China with caution

The denial of the trade war has brought relief worldwide. But when it comes to Chinese stocks, investors remain reluctant to bet on big profits moving forward. The Hang Seng China Enterprises index of continent of the continent traded in Hong Kong fell almost 17% from the low in April, and the cost of hedging against declines dropped to average levels after he hit a peak. In the US, the trend is similar to the largest exchange -traded funds that detect Chinese stocks. But unlike during the stimulus-activated rally of last year, there is no euphoria this time. While the China Enterprises index picked up a fifth week of profits, it is still almost 8% below the highlight it reached in March. Alibaba Group Holding Ltd. ‘s results last week had cold water on the hope that revived the technical sector earlier this year, and market keepers still expect Donald Trump to keep rates at a level that will limit Chinese exports to the ceasefire of 90 days. “Investors are probably cautious, given how unpredictable Trump and his administration carried,” said Han Piow Life, a fund manager at Maitri Asset Management Pte, a family office in Singapore. “Investors will have even more reasons to tame their bullishness about China, and expect more uncertain times as the geopolitical drama further unfolds.” Skepticism prevails after the tariff war has already harmed the trade in the region and delayed China’s factory activity. Meanwhile, the latest earnings results were a call for investors who bet on the great technical companies of the country, hoping for the progress in artificial intelligence, despite intense competition in space. In a note last week, JPMorgan Chase & Co. -Streets, including Tony SK Lee, wrote that the options market now shows a more balanced prospect, although traders’ positioning indicates that traders are net sellers of options. “The demand for investors for the exposure of the investment in Chinese stocks was subdued despite the progress in US China trading conversations,” the strategists wrote. “It’s a turnaround from the previous eight months, when investors were active buyers, especially from calls during momentum phases.” When the market increased last year over the hope of stimulus, traders who chased the rally sent a measure that detects China Enterprises Index Options prices. By contrast, the same measure ended at the lowest level last week since January. In another note, JPMorgan strategists, including chairman of the global research Joyce Chang, warned that competition between the nations, despite the tariff break, goes on to trade -to technology and geopolitics. “While markets are focused on the 90-day détente and dramatic reduction in tariff levels during this break, the US-China technology competition is likely to broaden and strengthen further,” they wrote. Although both Chinese and US stocks have benefited from relieving the trading tension, more should be done to restore confidence, according to Dave Mazza, CEO of Roundhill Investments in New York. “An untruth of trade tension and good faith are important steps to restore confidence,” he said. “It can catalyze a resumption of market leadership for the most influential US and China businesses in both markets.” © 2025 Bloomberg MP This article was generated from an automatic news agency feed without edits to text.