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>This Insight analyses <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com (9618 HK)</a> option strategies traded over the last five trading days on the Hong Kong Exchange. Strategy highlights and volatility context are provided.</li>
<li>
Bearish strategies dominate trading activity, outnumbering bullish ones by more than 3:1, with long volatility structures and calendar/diagonal spreads being prevalent.</li>
<li>
Long tail events: Several strategies follow a pattern of minimal upfront cost (0.1% premium), targeting a significant payout in case of large price movements within a short timeframe. </li>
</ul>


This Insight analyses JD.com (9618 HK) option strategies traded over the last five trading days on the Hong Kong Exchange. Strategy highlights and volatility context are provided.

Bearish strategies dominate trading activity, outnumbering bullish ones by more than 3:1, with long volatility structures and calendar/diagonal spreads being prevalent.

Long tail events: Several strategies follow a pattern of minimal upfront cost (0.1% premium), targeting a significant payout in case of large price movements within a short timeframe. 


JD.com (9618 HK): Strategic Highlights and Market View from HKEX Top Trades

Index Rebal Trades & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal Trades & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Index Rebalance

<ul>
<li>The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes. </li>
<li>In this insight, we take a look at the rankings of potential ADDs and potential DELs for the June 2025 index rebal event.</li>
<li>We see zero index changes based on the latest available data but we estimate there to be US$204mn one-way flows due to capping.</li>
</ul>


The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes. 
In this insight, we take a look at the rankings of potential ADDs and potential DELs for the June 2025 index rebal event.
We see zero index changes based on the latest available data but we estimate there to be US$204mn one-way flows due to capping.


Quiddity Leaderboard HSTECH Jun25: US$204mn One-Way; No Index Changes Likely

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.

Equity Capital Markets

Eternal Beauty Holdings Limited / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/eternal-beauty-holdings-limited" target="_blank" data-smartkarma-citation="entities:43725:1" rel="noopener">Eternal Beauty Holdings Limited</a> is looking to raise around US$144m in its Hong Kong IPO. </li>
<li>Eternal Beauty is the largest brand management company of perfumes in the combined markets of Mainland China, Hong Kong and Macau, in terms of retail sales in 2023.</li>
<li>We have looked at the company’s past performance in our previous note. In this note we talk about valuations.</li>
</ul>



Eternal Beauty Holdings Limited is looking to raise around US$144m in its Hong Kong IPO. 
Eternal Beauty is the largest brand management company of perfumes in the combined markets of Mainland China, Hong Kong and Macau, in terms of retail sales in 2023.
We have looked at the company’s past performance in our previous note. In this note we talk about valuations.


Eternal Beauty IPO - Not Expensive but Its Not Enticing Either

Sany Heavy Industry / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sany-heavy-industry-co-ltd" target="_blank" data-smartkarma-citation="entities:20183:1" rel="noopener">Sany Heavy Industry (600031 CH)</a>, aims to raise around US$1.5bn in its H-share listing.</li>
<li>Sany Heavy Industry was the world’s third largest and China’s largest construction machinery company in terms of construction machinery’s cumulative revenue from 2020 to 2024, according to Frost &amp; Sullivan.</li>
<li>In this note, we look at its past performance and other deal dynamics that might impact the listing.</li>
</ul>



Sany Heavy Industry (600031 CH), aims to raise around US$1.5bn in its H-share listing.
Sany Heavy Industry was the world’s third largest and China’s largest construction machinery company in terms of construction machinery’s cumulative revenue from 2020 to 2024, according to Frost &amp; Sullivan.
In this note, we look at its past performance and other deal dynamics that might impact the listing.


Sany Heavy Industries A/H Listing - Has Suffered Recently, Showing Signs of Stabilizing

China

JD.com Inc is an online direct sales company in China.  The Company offers a wide selection of products through its website and mobile applications.  JD.com sells appliances, computers, digital products, communication products, garments, books, and household items to consumers and vendors.

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JD.com Inc (ADR) (JD US)

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

JD.com (9618 HK): Strategic Highlights and Market View from HKEX Top Trades

Analysis of JD.com option strategies on HK Exchange: Bearish strategies dominate, long tail events with minimal upfront cost target significant...

Gaudenz Schneider

Quiddity Leaderboard HSTECH Jun25: US$204mn One-Way; No Index Changes Likely

AAC Technologies and China Literature are the highest-ranked potential ADD and potential DEL respectively. However, both of these names are very...

Janaghan Jeyakumar, CFA

Eternal Beauty IPO - Not Expensive but Its Not Enticing Either

Eternal Beauty Holdings Limited is looking to raise around US$144m in its Hong Kong IPO. We have looked at the past performance in our earlier...

Sumeet Singh

Sany Heavy Industries A/H Listing - Has Suffered Recently, Showing Signs of Stabilizing

Sany Heavy Industry (600031 CH), aims to raise around US$1.5bn in its H-share listing. In this note, we look at the company's past performance.

Sumeet Singh

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

JD.com (9618 HK): Strategic Highlights and Market View from HKEX Top Trades

​Analysis of JD.com option strategies on HK Exchange: Bearish strategies dominate, long tail events with minimal upfront cost target significant...

Gaudenz Schneider

Quiddity Leaderboard HSTECH Jun25: US$204mn One-Way; No Index Changes Likely

AAC Technologies and China Literature are the highest-ranked potential ADD and potential DEL respectively. However, both of these names are very...

Janaghan Jeyakumar, CFA

Eternal Beauty IPO - Not Expensive but Its Not Enticing Either

Eternal Beauty Holdings Limited is looking to raise around US$144m in its Hong Kong IPO. We have looked at the past performance in our earlier...

Sumeet Singh

Sany Heavy Industries A/H Listing - Has Suffered Recently, Showing Signs of Stabilizing

Sany Heavy Industry (600031 CH), aims to raise around US$1.5bn in its H-share listing. In this note, we look at the company's past performance.

Sumeet Singh

Analysis of JD.com option strategies on HK Exchange: Bearish strategies dominate, long tail events with minimal upfront cost target significant...