Derivatives and Quantitative Strategist

Gaudenz Schneider

Equity Derivatives

<ul>
<li>Box trades are gaining popularity on the Hong Kong Stock Exchange. These arbitrage strategies exploit price discrepancies in options markets for near risk-free profits.</li>
<li>Long box trades involve simultaneously buying bull call spreads and bear put spreads with identical strikes and expiration dates, creating a fixed payoff regardless of the underlying asset's price movement.</li>
<li>Box trades require careful execution consideration of spreads, commissions, margins, and fees, with risks primarily in execution and operations rather than market exposure.</li>
</ul>


Box trades are gaining popularity on the Hong Kong Stock Exchange. These arbitrage strategies exploit price discrepancies in options markets for near risk-free profits.
Long box trades involve simultaneously buying bull call spreads and bear put spreads with identical strikes and expiration dates, creating a fixed payoff regardless of the underlying asset's price movement.
Box trades require careful execution consideration of spreads, commissions, margins, and fees, with risks primarily in execution and operations rather than market exposure.


Box Trades Explained: How Traders Execute Near Risk-Free Arbitrage in Hong Kong's Options Market

<ul>
<li>The global auto industry faces significant tariff exposure. Option implied volatility offers a forward-looking assessment of risk.</li>
<li>Chinese car makers started to increase in implied volatility more than the other markets at the beginning of February. They now show the highest risk.</li>
<li>Recent implied volatility trends, asymmetric pricing (skew), and the term structure all seem to indicate that the Indian auto sector is the least exposed to international trade relations.</li>
</ul>


The global auto industry faces significant tariff exposure. Option implied volatility offers a forward-looking assessment of risk.
Chinese car makers started to increase in implied volatility more than the other markets at the beginning of February. They now show the highest risk.
Recent implied volatility trends, asymmetric pricing (skew), and the term structure all seem to indicate that the Indian auto sector is the least exposed to international trade relations.


EQD | Volatile Roads: Unveiling Risk in the Asian Auto Industry Through the Options Market

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Event-Driven

Contemporary Amperex Technology (CATL) / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/contemporary-amperex-technolog" target="_blank" data-smartkarma-citation="entities:24404:1" rel="noopener">Contemporary Amperex Technology (CATL) (300750 CH)</a>, one of the world’s largest battery solutions providers, aims to raise around US$5bn in its H-share listing.</li>
<li>CATL is the global leader in new energy vehicle battery solutions, in China and globally, as per SNE Research. Its A-shares have been listed since 2018.</li>
<li>In this note, we look at its past performance and other deal dynamics that might impact the listing.</li>
</ul>



Contemporary Amperex Technology (CATL) (300750 CH), one of the world’s largest battery solutions providers, aims to raise around US$5bn in its H-share listing.
CATL is the global leader in new energy vehicle battery solutions, in China and globally, as per SNE Research. Its A-shares have been listed since 2018.
In this note, we look at its past performance and other deal dynamics that might impact the listing.


CATL A/H Listing - Early Look - US$5bn Could Be Hong Kong’s Largest This Year

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

<ul>
<li>Press reports suggest that a merger between <a href="https://www.smartkarma.com/entities/goto-gojek-tokopedia-tbk-pt" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">GoTo Gojek Tokopedia</a> and <a href="https://www.smartkarma.com/entities/grab-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab</a> is back on the table, which is ironic given the progress of both companies towards profitability. </li>
<li>Any merger may encounter anti-trust issues in Indonesia, with some fallout for drivers and potentially merchants, which may encounter resistance from the government and even potential demonstrations but not insurmountable.</li>
<li>
<a href="https://www.smartkarma.com/entities/grab-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab</a> should book a net profit in 2025 plus higher growth, as its barbell strategy gains traction, but a <a href="https://www.smartkarma.com/entities/goto-gojek-tokopedia-tbk-pt" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">GoTo</a> merger could move the dial towards much higher profitability.</li>
</ul>


Press reports suggest that a merger between GoTo Gojek Tokopedia and Grab is back on the table, which is ironic given the progress of both companies towards profitability. 
Any merger may encounter anti-trust issues in Indonesia, with some fallout for drivers and potentially merchants, which may encounter resistance from the government and even potential demonstrations but not insurmountable.

Grab should book a net profit in 2025 plus higher growth, as its barbell strategy gains traction, but a GoTo merger could move the dial towards much higher profitability.


Grab Holdings (GRAB US) - GoTo Merger Rears Its Head?

Cross Asset Strategy

<ul>
<li>The Indonesian stock market was down 2% over the last year despite a flurry of inflows in the summer but this year looks interesting with a new government in place. </li>
<li>GDP growth forecasts are more optimistic for 2025 and government stimulus should help to drive higher consumption, with FDI driven by more value-added investments in the EV-related projects. </li>
<li>Increasing digitalisation of the economy and greater use of AI will drive profitability and data centre growth. Interest rates are expected to fall -50-100bps which should also be supportive.</li>
</ul>


The Indonesian stock market was down 2% over the last year despite a flurry of inflows in the summer but this year looks interesting with a new government in place. 
GDP growth forecasts are more optimistic for 2025 and government stimulus should help to drive higher consumption, with FDI driven by more value-added investments in the EV-related projects. 
Increasing digitalisation of the economy and greater use of AI will drive profitability and data centre growth. Interest rates are expected to fall -50-100bps which should also be supportive.


CrossASEAN Indonesia Strategy - Parting Clouds

China

BYD Company Limited manufactures automotive products. The Company produces ordinary passenger cars, commercial vehicles, and other products. BYD also operates battery making, rail transportation construction, and other businesses.

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BYD (002594 CH)

Box Trades Explained: How Traders Execute Near Risk-Free Arbitrage in Hong Kong's Options Market

JD.com (9618 HK) Earnings Call tonight 8:00 pm HKT. After yesterday's 3.06% move up, the ATM strike is now 165. Straddles offer an opportunity to...

Gaudenz Schneider

EQD | Volatile Roads: Unveiling Risk in the Asian Auto Industry Through the Options Market

Global auto industry faces tariff risk. The option market assigns the highest risk to Chinese car makers. The Indian auto sector appears least...

Gaudenz Schneider

CATL A/H Listing - Early Look - US$5bn Could Be Hong Kong’s Largest This Year

The company has now officially filed for a Hong Kong listing and is said to be looking to raise US$5-7bn. The lead banks on the deal are BofA,...

Sumeet Singh

Grab Holdings (GRAB US) - GoTo Merger Rears Its Head?

Grab should book a net profit in 2025 plus higher growth, as its barbell strategy gains traction, but a GoTo merger could move the dial towards...

Angus Mackintosh

CrossASEAN Indonesia Strategy - Parting Clouds

The Indonesian stock market was down 2% over the last year despite a flurry of inflows in the summer but this year looks interesting with a new...

Angus Mackintosh

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Box Trades Explained: How Traders Execute Near Risk-Free Arbitrage in Hong Kong's Options Market

JD.com (9618 HK) Earnings Call tonight 8:00 pm HKT. After yesterday's 3.06% move up, the ATM strike is now 165. Straddles offer an opportunity to...

Gaudenz Schneider

EQD | Volatile Roads: Unveiling Risk in the Asian Auto Industry Through the Options Market

​Global auto industry faces tariff risk. The option market assigns the highest risk to Chinese car makers. The Indian auto sector appears least...

Gaudenz Schneider

CATL A/H Listing - Early Look - US$5bn Could Be Hong Kong’s Largest This Year

The company has now officially filed for a Hong Kong listing and is said to be looking to raise US$5-7bn. The lead banks on the deal are BofA,...

Sumeet Singh

Grab Holdings (GRAB US) - GoTo Merger Rears Its Head?

Grab should book a net profit in 2025 plus higher growth, as its barbell strategy gains traction, but a GoTo merger could move the dial towards...

Angus Mackintosh

CrossASEAN Indonesia Strategy - Parting Clouds

The Indonesian stock market was down 2% over the last year despite a flurry of inflows in the summer but this year looks interesting with a new...

Angus Mackintosh

Global auto industry faces tariff risk. The option market assigns the highest risk to Chinese car makers. The Indian auto sector appears least...