Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Q1 saw record quarterly inflows by SOUTHBOUND investors at HK$435bn, beating the previous 2021Q1 record by &gt;HK$100bn. The first three weeks in April were HK$168bn. The next two weeks flat.</li>
<li>Two weeks ago saw SOEs sold quite heavily in somewhat weaker volume. This past week saw only 3 days of SOUTHBOUND trading and saw net selling of big internet names.</li>
<li>This week threatens to be quiet as well, as tariff news moves away from China for a little while, and towards foreign auto exporters, Canada, Mexico, and "trade frameworks."</li>
</ul>


Q1 saw record quarterly inflows by SOUTHBOUND investors at HK$435bn, beating the previous 2021Q1 record by &gt;HK$100bn. The first three weeks in April were HK$168bn. The next two weeks flat.
Two weeks ago saw SOEs sold quite heavily in somewhat weaker volume. This past week saw only 3 days of SOUTHBOUND trading and saw net selling of big internet names.
This week threatens to be quiet as well, as tariff news moves away from China for a little while, and towards foreign auto exporters, Canada, Mexico, and "trade frameworks."


HK Connect SOUTHBOUND Flows (To 2 May 2025); Tech Selling in a Quiet Week

Derivatives and Quantitative Strategist

Gaudenz Schneider

Equity Derivatives

<ul>
<li>Over the past five trading days, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> multi-leg option strategies showcased a variety of approaches. Strategy highlights are provided.</li>
<li>
Popular Strategies: Call/Put Spreads account for 70% of all strategies. With a bias towards bullish views, Bull Call Spreads outnumber Bear Put Spreads by 2:1.</li>
<li>
Lottery Trades: following observations of such strategies in other stocks, a lotter trade bets on a low probability event with a high payout. Trade size tends to be sizable.</li>
</ul>


Over the past five trading days, Tencent (700 HK) multi-leg option strategies showcased a variety of approaches. Strategy highlights are provided.

Popular Strategies: Call/Put Spreads account for 70% of all strategies. With a bias towards bullish views, Bull Call Spreads outnumber Bear Put Spreads by 2:1.

Lottery Trades: following observations of such strategies in other stocks, a lotter trade bets on a low probability event with a high payout. Trade size tends to be sizable.


Tencent (700 HK): Top Trades and Strategic Insights from HKEX Options Trading

<ul>
<li>
Implied Volatility Trends: One-month implied volatility for <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> has declined from recent peaks, aligning near its 3-year median, indicating a potential stabilization in market expectations.</li>
<li>
Skew and Term Structure Dynamics: The term structure is largely flat with a slight uplift due to the upcoming earnings on 14 May 2025. A pronounced volatility smile favors spreads.</li>
<li>
Open Interest Distribution: Liquidity is concentrated in near-term (April, May) and quarterly expiries, with call open interest slightly outweighing puts (48-60%).</li>
</ul>



Implied Volatility Trends: One-month implied volatility for Tencent (700 HK) has declined from recent peaks, aligning near its 3-year median, indicating a potential stabilization in market expectations.

Skew and Term Structure Dynamics: The term structure is largely flat with a slight uplift due to the upcoming earnings on 14 May 2025. A pronounced volatility smile favors spreads.

Open Interest Distribution: Liquidity is concentrated in near-term (April, May) and quarterly expiries, with call open interest slightly outweighing puts (48-60%).


Tencent (700 HK): Volatility Smile Signals Strategic Opportunities in Options Trading

<ul>
<li>Q1 saw record quarterly inflows by SOUTHBOUND investors at HK$435bn, beating the previous record of Q1 2021 by more than HK$100bn. The first three weeks in April were HK$168bn.</li>
<li>The fourth week (this past week) saw net outflows on low volume as SOUTHBOUND investors sold SOEs quite heavily. </li>
<li>9 of the top 10 Net Sells as % of Volume this past week had China, Beijing, or Shanghai as the first word in their name.</li>
</ul>


Q1 saw record quarterly inflows by SOUTHBOUND investors at HK$435bn, beating the previous record of Q1 2021 by more than HK$100bn. The first three weeks in April were HK$168bn.
The fourth week (this past week) saw net outflows on low volume as SOUTHBOUND investors sold SOEs quite heavily. 
9 of the top 10 Net Sells as % of Volume this past week had China, Beijing, or Shanghai as the first word in their name.


HK Connect SOUTHBOUND Flows (To 25 Apr 2025); First Net Sell in Ages, Led by Heavy SOE Selling

<ul>
<li>Q1 saw record quarterly inflows by SOUTHBOUND investors at HK$435bn, beating the previous record of Q1 2021 by more than HK$100bn. The first two weeks in April were HK$145bn. </li>
<li>The first two weeks in April were HK$145bn as what appeared to be national team, or equally patriotic buyers, showed up droves to buy financials, energy, telecoms, and big techs.</li>
<li>Included is a summary of important China Stocks-relevant news as I saw it this week, but frankly, the only thing that matters is the back and forth by the Donald.</li>
</ul>


Q1 saw record quarterly inflows by SOUTHBOUND investors at HK$435bn, beating the previous record of Q1 2021 by more than HK$100bn. The first two weeks in April were HK$145bn. 
The first two weeks in April were HK$145bn as what appeared to be national team, or equally patriotic buyers, showed up droves to buy financials, energy, telecoms, and big techs.
Included is a summary of important China Stocks-relevant news as I saw it this week, but frankly, the only thing that matters is the back and forth by the Donald.


HK Connect SOUTHBOUND Flows (To 11 Apr 2025); Record Net Buying

China

Tencent Holdings Limited operates as an investment holding company. The Company, through its subsidiaries, provides Internet and mobile value-added services (VAS), online advertising, and e-commerce transactions. Tencent Holdings offers services to users worldwide.

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Tencent Holdings (ADR) (TCEHY US)

HK Connect SOUTHBOUND Flows (To 2 May 2025); Tech Selling in a Quiet Week

Volume was weaker in the 3-day week ahead of a long weekend. Nothing stood out except selling of tech and consumer discretionary (BYD and BABA). We...

Travis Lundy

Tencent (700 HK): Top Trades and Strategic Insights from HKEX Options Trading

Tencent's multi-leg option strategies show a bullish bias, with Call/Put Spreads dominating and Lottery Trades making an appearance.

Gaudenz Schneider

Tencent (700 HK): Volatility Smile Signals Strategic Opportunities in Options Trading

Implied volatility for Tencent stabilizes, term structure flat with upcoming earnings, call open interest slightly outweighs puts.

Gaudenz Schneider

HK Connect SOUTHBOUND Flows (To 25 Apr 2025); First Net Sell in Ages, Led by Heavy SOE Selling

SOUTHBOUND activity low again this 4-day week. Trade tantrums not helping, but markets up despite SOUTHBOUND net selling for the first time in a...

Travis Lundy

HK Connect SOUTHBOUND Flows (To 11 Apr 2025); Record Net Buying

SOUTHBOUND saw a record week of net buying of HK at +82.25bn. Tech (including Consumer Disc name Alibaba) were the big net buys. SOE banks, tech,...

Travis Lundy

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

HK Connect SOUTHBOUND Flows (To 2 May 2025); Tech Selling in a Quiet Week

Volume was weaker in the 3-day week ahead of a long weekend. Nothing stood out except selling of tech and consumer discretionary (BYD and BABA). We...

Travis Lundy

Tencent (700 HK): Top Trades and Strategic Insights from HKEX Options Trading

​Tencent's multi-leg option strategies show a bullish bias, with Call/Put Spreads dominating and Lottery Trades making an appearance.

Gaudenz Schneider

Tencent (700 HK): Volatility Smile Signals Strategic Opportunities in Options Trading

​Implied volatility for Tencent stabilizes, term structure flat with upcoming earnings, call open interest slightly outweighs puts.

Gaudenz Schneider

HK Connect SOUTHBOUND Flows (To 25 Apr 2025); First Net Sell in Ages, Led by Heavy SOE Selling

SOUTHBOUND activity low again this 4-day week. Trade tantrums not helping, but markets up despite SOUTHBOUND net selling for the first time in a...

Travis Lundy

HK Connect SOUTHBOUND Flows (To 11 Apr 2025); Record Net Buying

SOUTHBOUND saw a record week of net buying of HK at +82.25bn. Tech (including Consumer Disc name Alibaba) were the big net buys. SOE banks, tech,...

Travis Lundy

Tencent's multi-leg option strategies show a bullish bias, with Call/Put Spreads dominating and Lottery Trades making an appearance.

Implied volatility for Tencent stabilizes, term structure flat with upcoming earnings, call open interest slightly outweighs puts.