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>
<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> Q4 2024 earnings significantly exceeded analyst expectations with revenue reaching RMB 347 billion (13.4% YoY increase).</li>
<li>The stock experienced a volatile two-day reaction, rising 8.4% on March 6 followed by a 5.0% decline on March 7, resulting in a net gain of 3.03%.</li>
<li>Options strategies including straddles, strangles, and call calendar spreads were actively traded ahead of earnings with potential intraday profitability. Longer dated implied volatility decreased following the announcement.</li>
</ul>



JD.com (9618 HK) Q4 2024 earnings significantly exceeded analyst expectations with revenue reaching RMB 347 billion (13.4% YoY increase).
The stock experienced a volatile two-day reaction, rising 8.4% on March 6 followed by a 5.0% decline on March 7, resulting in a net gain of 3.03%.
Options strategies including straddles, strangles, and call calendar spreads were actively traded ahead of earnings with potential intraday profitability. Longer dated implied volatility decreased following the announcement.


JD.com (9618 HK) FY Earnings Recap: Intra-Day Swing of 7.3%.

Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Equity Bottom-Up

<ul>
<li>JD C4Q24 revenue exceeded our estimate/consensus by 3%/4% and adjusted NI by 16%/19%, driven by subsidies and logistic efficiency gains.</li>
<li>We expect JD to maintain 11% YoY revenue growth in C1H25 but moderate to 5.9% in 2H. </li>
<li>We maintain JD.com's TP at US$ 52 and the BUY rating. Market concern on lack of details for long term driver is valid but JD.com still has time.</li>
</ul>


JD C4Q24 revenue exceeded our estimate/consensus by 3%/4% and adjusted NI by 16%/19%, driven by subsidies and logistic efficiency gains.
We expect JD to maintain 11% YoY revenue growth in C1H25 but moderate to 5.9% in 2H. 
We maintain JD.com's TP at US$ 52 and the BUY rating. Market concern on lack of details for long term driver is valid but JD.com still has time.


[JD.com, Inc (JD US, BUY, TP US$52) Earnings Review]: Market Calls for Longer-Term Growth Drivers

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>JD.com (JD) reported (6 Mar) 4Q24 results: revenue was RMB347.0bn, up 13.4% YoY (4Q23: 3.6%；3Q24: 5.1%), 4% ahead of consensus; non-GAAP net profit was RMB11.3bn, up 34% YoY, and was 22% ahead of consensus, thanks to a 15% beat on JD Retail’s (JDR) OP aided by stronger-than-expected scale effect.</li><li>For 2024, total revenue was up 7% YoY to RMB1.2tn, and nonGAAP net profit was up 36% YoY to RMB47.8bn.</li><li>Factoring into more positive than expected impact from nationwide trade-in program, as well as better-thanexpected revenue generation capability in supermarket category bolstered by enhanced capability in capturing consumer demand, we lift 2025-2026E forecasts on revenue by 4-5% and that for non-GAAP NP by 5-7%. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

JD.com (JD) reported (6 Mar) 4Q24 results: revenue was RMB347.0bn, up 13.4% YoY (4Q23: 3.6%；3Q24: 5.1%), 4% ahead of consensus; non-GAAP net profit was RMB11.3bn, up 34% YoY, and was 22% ahead of consensus, thanks to a 15% beat on JD Retail’s (JDR) OP aided by stronger-than-expected scale effect.For 2024, total revenue was up 7% YoY to RMB1.2tn, and nonGAAP net profit was up 36% YoY to RMB47.8bn.Factoring into more positive than expected impact from nationwide trade-in program, as well as better-thanexpected revenue generation capability in supermarket category bolstered by enhanced capability in capturing consumer demand, we lift 2025-2026E forecasts on revenue by 4-5% and that for non-GAAP NP by 5-7%. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

JD.com (JD US) - Results Beat; Eyeing on Core Business Earnings Growth

<ul>
<li>We expect JD.com C4Q24 revenue/non-GAAP NI to be RMB337bn/9.7bn, 1.6%/6.5% above consensus, benefiting from trade-in subsidies and logistics;</li>
<li>With 2025 having four quarters of trade-in subsidy vs. 2024's one quarter and smartphone's participation, JD.com is on solid growth footing in our universe. </li>
<li>We raised JD.com's TP from US$50 to US$ 52 TP and maintain BUY rating.</li>
</ul>


We expect JD.com C4Q24 revenue/non-GAAP NI to be RMB337bn/9.7bn, 1.6%/6.5% above consensus, benefiting from trade-in subsidies and logistics;
With 2025 having four quarters of trade-in subsidy vs. 2024's one quarter and smartphone's participation, JD.com is on solid growth footing in our universe. 
We raised JD.com's TP from US$50 to US$ 52 TP and maintain BUY rating.


[JD.com, Inc (JD US, BUY, TP US$52) TP Change]: C4Q24 Preview: Still the Safe Choice into 2025

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 (9618 HK)

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) FY Earnings Recap: Intra-Day Swing of 7.3%.

JD.com's Q4 earnings beat expectations, causing stock volatility and resulting in a net gain of only 3.0% over two days. Options strategies were...

Gaudenz Schneider

[JD.com, Inc (JD US, BUY, TP US$52) Earnings Review]: Market Calls for Longer-Term Growth Drivers

JD's Q4 revenue and adjusted NI beat estimates, driven by subsidies and logistic gains. Revenue growth expected to slow in 2H25. Maintaining BUY...

Blue Lotus Research Institute

JD.com (JD US) - Results Beat; Eyeing on Core Business Earnings Growth

JD.com (JD) reported (6 Mar) 4Q24 results: revenue was RMB347.0bn, up 13.4% YoY (4Q23: 3.6%；3Q24: 5.1%), 4% ahead of consensus

CMB International

[JD.com, Inc (JD US, BUY, TP US$52) TP Change]: C4Q24 Preview: Still the Safe Choice into 2025

JD.com's revenue and non-GAAP net income exceed expectations, driven by trade-in subsidies and logistics, with strong growth potential in the...

Blue Lotus Research Institute

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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) FY Earnings Recap: Intra-Day Swing of 7.3%.

​JD.com's Q4 earnings beat expectations, causing stock volatility and resulting in a net gain of only 3.0% over two days. Options strategies were...

Gaudenz Schneider

[JD.com, Inc (JD US, BUY, TP US$52) Earnings Review]: Market Calls for Longer-Term Growth Drivers

​JD's Q4 revenue and adjusted NI beat estimates, driven by subsidies and logistic gains. Revenue growth expected to slow in 2H25. Maintaining BUY...

Blue Lotus Research Institute

JD.com (JD US) - Results Beat; Eyeing on Core Business Earnings Growth

JD.com (JD) reported (6 Mar) 4Q24 results: revenue was RMB347.0bn, up 13.4% YoY (4Q23: 3.6%；3Q24: 5.1%), 4% ahead of consensus

CMB International

[JD.com, Inc (JD US, BUY, TP US$52) TP Change]: C4Q24 Preview: Still the Safe Choice into 2025

​JD.com's revenue and non-GAAP net income exceed expectations, driven by trade-in subsidies and logistics, with strong growth potential in the...

Blue Lotus Research Institute

JD.com's Q4 earnings beat expectations, causing stock volatility and resulting in a net gain of only 3.0% over two days. Options strategies were...

JD's Q4 revenue and adjusted NI beat estimates, driven by subsidies and logistic gains. Revenue growth expected to slow in 2H25. Maintaining BUY...

JD.com's revenue and non-GAAP net income exceed expectations, driven by trade-in subsidies and logistics, with strong growth potential in the...