Quantitative Researcher, MRM Research

Nico Rosti

Quantitative Researcher

MRM Research

Quantitative Research

Equity Derivatives

<ul>
<li>The <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">HSI INDEX</a> has been defying gravity, recently. It is up more than 30% from its most recent low.</li>
<li>In our previous, <a href="https://www.smartkarma.com/insights/hsi-to-find-strong-support-between-18-8k-and-17-5k-long-term-uptrend-set-to-restart" target="_blank" rel="noopener">Jan. 11th insight</a> we highlighted very precisely the support zone (18.8k-17.5k) from where the index was poised to resume its rally (the bottom was printed at 18671).</li>
<li>
Our models are currently indicating a very overbought condition. Leveraging the information relayed by <a href="https://www.smartkarma.com/profiles/gaudenz-schneider" target="_blank" data-smartkarma-citation="accounts:66501" rel="noopener">Gaudenz Schneider</a> in a recent insight, we think a "HSI PUT" could make sense here. </li>
</ul>


The HSI INDEX has been defying gravity, recently. It is up more than 30% from its most recent low.
In our previous, Jan. 11th insight we highlighted very precisely the support zone (18.8k-17.5k) from where the index was poised to resume its rally (the bottom was printed at 18671).

Our models are currently indicating a very overbought condition. Leveraging the information relayed by Gaudenz Schneider in a recent insight, we think a "HSI PUT" could make sense here. 


The HSI PUT: Hedging Strategies for an Overextended Rally

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Equity Bottom-Up

Zoomlion Heavy Industry H / Equity Bottom-Up

<ul>
<li>Hong Kong continues its secular bull market and has now reached its first significant resistance in the 24k to 25k.  Growth factor investing is leading in long-only investing.</li>
<li>Mainland buyers continue buying Hong Kong stocks at a historic rate with buying focused in the tech sector and specifically in AI-related companies.</li>
<li>
<a href="https://www.smartkarma.com/entities/zoomlion-heavy-industry-h" target="_blank" data-smartkarma-citation="entities:7817:1" rel="noopener">Zoomlion Heavy Industry H (1157 HK)</a> has broken its double-top formation and is at a new high.  <a href="https://www.smartkarma.com/entities/vtech-holdings-ltd" target="_blank" data-smartkarma-citation="entities:18812:1" rel="noopener">Vtech Holdings (303 HK)</a> broke out to a new high with improving momentum.
</li>
</ul>


Hong Kong continues its secular bull market and has now reached its first significant resistance in the 24k to 25k.  Growth factor investing is leading in long-only investing.
Mainland buyers continue buying Hong Kong stocks at a historic rate with buying focused in the tech sector and specifically in AI-related companies.

Zoomlion Heavy Industry H (1157 HK) has broken its double-top formation and is at a new high.  Vtech Holdings (303 HK) broke out to a new high with improving momentum.



Technically Speaking, Breakouts and Breakdowns: HONG KONG (March 6)

Derivatives and Quantitative Strategist

Gaudenz Schneider

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index (HSI INDEX)</a> put options show concentrated positioning at the 19,000 and 20,000 strike levels.</li>
<li>Traders continue to establish new positions approximately 15%-20% below current market levels, suggesting protection against major market corrections rather than minor pullbacks. The focus is on near-term risk.</li>
<li>Implied volatility has remained stable at 25-30% over the past two weeks, consistent with a broadly sideways movement in the index itself.</li>
</ul>



Hang Seng Index (HSI INDEX) put options show concentrated positioning at the 19,000 and 20,000 strike levels.
Traders continue to establish new positions approximately 15%-20% below current market levels, suggesting protection against major market corrections rather than minor pullbacks. The focus is on near-term risk.
Implied volatility has remained stable at 25-30% over the past two weeks, consistent with a broadly sideways movement in the index itself.


Hang Seng Index (HSI): Trends in PUT Strikes and Open Interest Visualized in Animation and Charts

<ul>
<li>Market traders of <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index (HSI INDEX)</a> call options maintain significant holdings in lower strikes, with notable concentration at the 20,000 strike level.</li>
<li>Open interest data reveals significant increase in open interest for 25,000 and 26,000 strike calls since late February, reflecting active trading as traders built new positions.</li>
<li>Despite increased trading activity and changes in market positioning, implied volatility has remained stable at 25-30% over the past two weeks, reflecting a consistent market sentiment.</li>
</ul>


Market traders of Hang Seng Index (HSI INDEX) call options maintain significant holdings in lower strikes, with notable concentration at the 20,000 strike level.
Open interest data reveals significant increase in open interest for 25,000 and 26,000 strike calls since late February, reflecting active trading as traders built new positions.
Despite increased trading activity and changes in market positioning, implied volatility has remained stable at 25-30% over the past two weeks, reflecting a consistent market sentiment.


Hang Seng Index (HSI): Trends in CALL Strikes and Open Interest Visualized in Animation and Charts

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Caixin Global

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CX Daily: ‘Ne Zha 2’ Heralds New Era for Chinese Animation 

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The HSI PUT: Hedging Strategies for an Overextended Rally

The HSI Index is defying gravity, up over 30% from its recent lows, but our models suggest it is very overbought, indicating a potential...

Nico Rosti

Technically Speaking, Breakouts and Breakdowns: HONG KONG (March 6)

Hong Kong continues its secular bull market outperforming global markets over the last year. After advancing more than 20% this year, the market...

David Mudd

Hang Seng Index (HSI): Trends in PUT Strikes and Open Interest Visualized in Animation and Charts

Traders are heavily positioned in Hang Seng Index put options at 19,000 and 20,000 strike levels, indicating protection against major market...

Gaudenz Schneider

Hang Seng Index (HSI): Trends in CALL Strikes and Open Interest Visualized in Animation and Charts

Traders of Hang Seng Index call options maintain significant holdings at lower strikes. Increased interest in 25,000 and 26,000 strikes

Gaudenz Schneider

CX Daily: ‘Ne Zha 2’ Heralds New Era for Chinese Animation

TOP STORY Ne Zha 2 / In Depth: ‘Ne Zha 2’ heralds new era for Chinese animation “Ne Zha 2” became the highest-grossing animated film of all time...

Caixin Global

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52-week Range

Market Cap (USDm)

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The HSI PUT: Hedging Strategies for an Overextended Rally

​The HSI Index is defying gravity, up over 30% from its recent lows, but our models suggest it is very overbought, indicating a potential...

Nico Rosti

Technically Speaking, Breakouts and Breakdowns: HONG KONG (March 6)

Hong Kong continues its secular bull market outperforming global markets over the last year. After advancing more than 20% this year, the market...

David Mudd

Hang Seng Index (HSI): Trends in PUT Strikes and Open Interest Visualized in Animation and Charts

​Traders are heavily positioned in Hang Seng Index put options at 19,000 and 20,000 strike levels, indicating protection against major market...

Gaudenz Schneider

Hang Seng Index (HSI): Trends in CALL Strikes and Open Interest Visualized in Animation and Charts

Traders of Hang Seng Index call options maintain significant holdings at lower strikes. Increased interest in 25,000 and 26,000 strikes

Gaudenz Schneider

CX Daily: ‘Ne Zha 2’ Heralds New Era for Chinese Animation

TOP STORY Ne Zha 2 / In Depth: ‘Ne Zha 2’ heralds new era for Chinese animation “Ne Zha 2” became the highest-grossing animated film of all time...

Caixin Global

The HSI Index is defying gravity, up over 30% from its recent lows, but our models suggest it is very overbought, indicating a potential...

Traders are heavily positioned in Hang Seng Index put options at 19,000 and 20,000 strike levels, indicating protection against major market...