Derivatives and Quantitative Strategist

Gaudenz Schneider

Equity Derivatives

<ul>
<li>This Insight analyses <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a> tailor-made option strategies traded over the last five trading days on the Hong Kong Exchange. Strategy highlights and volatility context are provided.</li>
<li>These traders tailor structures to risk budgets and take calculated bets. Strategies are mostly bullish, and exclusively long volatility despite implied volatility in its 98th percentile.</li>
<li>Call spreads can indicate where bullish traders expect the rally, driven by its own momentum, to peak. One trade suggests a ceiling of 70 by mid-year. </li>
</ul>


This Insight analyses Xiaomi Corp (1810 HK) tailor-made option strategies traded over the last five trading days on the Hong Kong Exchange. Strategy highlights and volatility context are provided.
These traders tailor structures to risk budgets and take calculated bets. Strategies are mostly bullish, and exclusively long volatility despite implied volatility in its 98th percentile.
Call spreads can indicate where bullish traders expect the rally, driven by its own momentum, to peak. One trade suggests a ceiling of 70 by mid-year. 


Xiaomi (1810 HK) - Riding the Wave. How Option Traders Navigate. Top Trades Analyzed.

Asia L/S Equity PM/Macro/Thematic Idea Generation

Rikki Malik

Cross Asset Strategy

<ul>
<li>A review of recent events/data impacting our investment themes or outlook</li>
<li>China rally continues in the tech sector as investors “discover” the value</li>
<li>More evidence that the USD has peaked while gold continues to be at risk of a stock market correction</li>
</ul>


A review of recent events/data impacting our investment themes or outlook
China rally continues in the tech sector as investors “discover” the value
More evidence that the USD has peaked while gold continues to be at risk of a stock market correction


Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>There will be 5 changes for the Hang Seng Internet &amp; Information Technology Index (HSIII Index) at the March rebalance. There is one surprise for us with Synagistics being added.</li>
<li>Estimated one-way turnover at the rebalance is 6.5% resulting in a round-trip trade of HK$3.74bn (US$482m). 4 stocks will have over 1x ADV to trade.</li>
<li>
<a href="https://www.smartkarma.com/entities/horizon-robotics-inc" target="_blank" data-smartkarma-citation="entities:35637:1" rel="noopener">Horizon Robotics (9660 HK)</a> is an add to the HSIII, <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng TECH Index</a> and HSCI. Inclusion in Southbound Stock Connect will take place in May.</li>
</ul>


There will be 5 changes for the Hang Seng Internet &amp; Information Technology Index (HSIII Index) at the March rebalance. There is one surprise for us with Synagistics being added.
Estimated one-way turnover at the rebalance is 6.5% resulting in a round-trip trade of HK$3.74bn (US$482m). 4 stocks will have over 1x ADV to trade.

Horizon Robotics (9660 HK) is an add to the HSIII, Hang Seng TECH Index and HSCI. Inclusion in Southbound Stock Connect will take place in May.


Hang Seng Internet & IT Index Rebalance: Five Changes with First De-SPAC Listing In

<ul>
<li>This Insight analyses <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group Holding (9988 HK)</a> tailor-made option strategies traded over the last five trading days on the Hong Kong Exchange. Strategy highlights and volatility context are provided.</li>
<li>These traders tailor structures to risk budgets and take calculated bets. Several large box trades appeared on the ticker.</li>
<li>Expect more movement on <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group Holding (9988 HK)</a>'s <strong>Q3 earnings announcement tomorrow, </strong>20 February 2025. Option-implied move at the end of this Insight.</li>
</ul>


This Insight analyses Alibaba Group Holding (9988 HK) tailor-made option strategies traded over the last five trading days on the Hong Kong Exchange. Strategy highlights and volatility context are provided.
These traders tailor structures to risk budgets and take calculated bets. Several large box trades appeared on the ticker.
Expect more movement on Alibaba Group Holding (9988 HK)'s Q3 earnings announcement tomorrow, 20 February 2025. Option-implied move at the end of this Insight.


Alibaba (9988 HK): How Options Traders Are Navigating the Rally and Volatility. Top Trades.

Event-Driven

<ul>
<li>Post market close on Friday, Hang Seng Indexes will announce the changes for the <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> that will be implemented at the close on 7 March.</li>
<li>With no constituent changes, one-way turnover will be 2.75% with 3 stocks being capped downward. This gives the index committee the opportunity to add more stocks without significantly increasing turnover.</li>
<li>The return of the high and medium probability inclusions has matched the performance of the <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</a> over the last few months, Shorts have climbed in some names.</li>
</ul>


Post market close on Friday, Hang Seng Indexes will announce the changes for the Hang Seng Index (HSI INDEX) that will be implemented at the close on 7 March.
With no constituent changes, one-way turnover will be 2.75% with 3 stocks being capped downward. This gives the index committee the opportunity to add more stocks without significantly increasing turnover.
The return of the high and medium probability inclusions has matched the performance of the Hang Seng Index over the last few months, Shorts have climbed in some names.


Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for March

Hong Kong

The Hang Seng Index is a free-float capitalization-weighted index of a selection of companies from the Stock Exchange of Hong Kong. The components of the index are divided into four subindices: Commerce and Industry, Finance, Utilities, and Properties. The index was developed with a base level of 100 as of July 31, 1964.

Hang Seng Index (HSI INDEX)

Xiaomi (1810 HK) - Riding the Wave. How Option Traders Navigate. Top Trades Analyzed.

Analysis of Xiaomi Corp's option strategies on HK Exchange shows bullish traders taking calculated bets despite high volatility, with call spreads...

Gaudenz Schneider

Overview #16 – And the Beat Goes On

A review of recent events/data impacting our investment themes and outlook. We follow up on the Chinese bull market, Gold and the USD/JPY

Rikki Malik

Hang Seng Internet & IT Index Rebalance: Five Changes with First De-SPAC Listing In

There are 5 changes for the HSIII in March. Estimated one-way turnover at the rebalance is 6.5% resulting in a round-trip trade of HK$3.74bn...

Brian Freitas

Alibaba (9988 HK): How Options Traders Are Navigating the Rally and Volatility. Top Trades.

Analysis of tailor-made option strategies on Alibaba Group Holding with focus on risk profile and yield. Q3 earnings announcement tomorrow, option...

Gaudenz Schneider

Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for March

We highlight 9 potential inclusions to the HSI in March. Downward capping on Tencent and Alibaba gives the index committee an opportunity to add...

Brian Freitas

Xiaomi (1810 HK) - Riding the Wave. How Option Traders Navigate. Top Trades Analyzed.

​Analysis of Xiaomi Corp's option strategies on HK Exchange shows bullish traders taking calculated bets despite high volatility, with call spreads...

Gaudenz Schneider

Overview #16 – And the Beat Goes On

A review of recent events/data impacting our investment themes and outlook. We follow up on the Chinese bull market, Gold and the USD/JPY

Rikki Malik

Hang Seng Internet & IT Index Rebalance: Five Changes with First De-SPAC Listing In

There are 5 changes for the HSIII in March. Estimated one-way turnover at the rebalance is 6.5% resulting in a round-trip trade of HK$3.74bn...

Brian Freitas

Alibaba (9988 HK): How Options Traders Are Navigating the Rally and Volatility. Top Trades.

​Analysis of tailor-made option strategies on Alibaba Group Holding with focus on risk profile and yield. Q3 earnings announcement tomorrow, option...

Gaudenz Schneider

Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for March

We highlight 9 potential inclusions to the HSI in March. Downward capping on Tencent and Alibaba gives the index committee an opportunity to add...

Brian Freitas

Analysis of Xiaomi Corp's option strategies on HK Exchange shows bullish traders taking calculated bets despite high volatility, with call spreads...

Analysis of tailor-made option strategies on Alibaba Group Holding with focus on risk profile and yield. Q3 earnings announcement tomorrow, option...