Equity Derivatives and Volatility Specialist, Clifton Derivatives

John Ley

Equity Derivatives and Volatility Specialist

Clifton Derivatives

Independent derivative and volatility research firm focusing on events/catalysts, earnings, relative value and cross asset volatility strategies.

Event-Driven

<ul>
<li>Tough week with 82% of optionable stocks we survey declining on the week but no sign of panic as investors still prefer Calls over Puts. </li>
<li>Tencent was far and away the volume leader, accounting for 37% of all option trading.</li>
<li>Materials was the only Sector to see price gains and implied vol rose across all Sectors we survey.</li>
</ul>


Tough week with 82% of optionable stocks we survey declining on the week but no sign of panic as investors still prefer Calls over Puts. 
Tencent was far and away the volume leader, accounting for 37% of all option trading.
Materials was the only Sector to see price gains and implied vol rose across all Sectors we survey.


EQD | Hong Kong Single Stock Options Weekly January 06 – 10

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

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 Bottom-Up

<ul>
<li>NEV retail deliveries grew by 41% in 2024, higher than 36% in 2023.</li>
<li>The US Department of Defense designated Tencent as a Chinese Military Company.</li>
<li>Smart Share Global plans to go private, as the company has no exclusive advantage.</li>
</ul>


NEV retail deliveries grew by 41% in 2024, higher than 36% in 2023.
The US Department of Defense designated Tencent as a Chinese Military Company.
Smart Share Global plans to go private, as the company has no exclusive advantage.


China Consumption Weekly (13 Jan 2025): NEV 2024, Tencent in Blacklist, Energy Monster Going Private

<ul>
<li>Investors haven’t lost their enthusiasm for Tencent. The put/call ratio is a long way from indicating panic.</li>
<li>Implied vols have risen but are far from panic levels with 1M implied at it's 39th percentile over the past year and 15th percentile since 2001.</li>
<li>Skew has risen significantly for out-of-the-money Puts as spot has moved into a range where there is higher Put positioning vs Call positioning. </li>
</ul>


Investors haven’t lost their enthusiasm for Tencent. The put/call ratio is a long way from indicating panic.
Implied vols have risen but are far from panic levels with 1M implied at it's 39th percentile over the past year and 15th percentile since 2001.
Skew has risen significantly for out-of-the-money Puts as spot has moved into a range where there is higher Put positioning vs Call positioning. 


EQD | Tencent – Call Buyers Haven’t Lost That Loving Feeling

Derivatives and Quantitative Strategist

Gaudenz Schneider

<ul>
<li>
<a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener"><strong>Tencent</strong> (700 HK)</a> shares fell 7.3% on 7 January, after being designated a Chinese Military Company by the U.S. Department of Defense, prompting volatility to spike.</li>
<li>Given the potential for further downside, or a relief rally, significant price movements and high volatility are to be expected.</li>
<li>A long straddle is detailed to capitalize on the anticipated volatility in <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> .</li>
</ul>



Tencent (700 HK) shares fell 7.3% on 7 January, after being designated a Chinese Military Company by the U.S. Department of Defense, prompting volatility to spike.
Given the potential for further downside, or a relief rally, significant price movements and high volatility are to be expected.
A long straddle is detailed to capitalize on the anticipated volatility in Tencent (700 HK) .


EQD | Tencent (700 HK) Option Strategy for Navigating a Volatile Market

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

<ul>
<li>The U.S. Department of Defense has designated <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> as a Chinese Military Company. <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd-69366efb-cf6b-404d-a0e4-c6b9b2e128dc" target="_blank" data-smartkarma-citation="entities:17:1" rel="noopener">Tencent Holdings (ADR) (TCEHY US)</a> shares were down nearly 8% overnight.</li>
<li>There is no change to the Non-SDN Chinese Military-Industrial Complex Companies List (NS-CMIC) yet. But the overlap between the DoD list and the NS-CMIC list is high.</li>
<li>If added to the NS-CMIC list, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> will be deleted from global indexes and there will be HUGE passive selling from these trackers.</li>
</ul>


The U.S. Department of Defense has designated Tencent (700 HK) as a Chinese Military Company. Tencent Holdings (ADR) (TCEHY US) shares were down nearly 8% overnight.
There is no change to the Non-SDN Chinese Military-Industrial Complex Companies List (NS-CMIC) yet. But the overlap between the DoD list and the NS-CMIC list is high.
If added to the NS-CMIC list, Tencent (700 HK) will be deleted from global indexes and there will be HUGE passive selling from these trackers.


Tencent (700 HK): DoD Says Chinese Military Company; Not on NS-CMIC List Yet

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.

Price Gauge
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Tencent (700 HK)

EQD | Hong Kong Single Stock Options Weekly January 06 – 10

Investors remain calm despite majority of optionable stocks declining, with preference for Calls over Puts; Tencent dominates option trading...

John Ley

China Consumption Weekly (13 Jan 2025): NEV 2024, Tencent in Blacklist, Energy Monster Going Private

NEV retail deliveries grew by 41% in 2024, higher than 36% in 2023. US Department of Defense designated Tencent as a Chinese Military Company....

Ming Lu

EQD | Tencent – Call Buyers Haven’t Lost That Loving Feeling

Investors remain optimistic about Tencent as put/call ratio shows no signs of panic. Implied vols have increased but are still below panic levels,...

John Ley

EQD | Tencent (700 HK) Option Strategy for Navigating a Volatile Market

Tencent shares drop 7.3% after being labeled a Chinese Military Company by the US. This option strategy positions traders for further price swings.

Gaudenz Schneider

Tencent (700 HK): DoD Says Chinese Military Company; Not on NS-CMIC List Yet

The U.S. DoD has designated Tencent as a Chinese Military Company. The stock is not on the NS-CMIC list yet and could be added later. Addition to...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

EQD | Hong Kong Single Stock Options Weekly January 06 – 10

​Investors remain calm despite majority of optionable stocks declining, with preference for Calls over Puts; Tencent dominates option trading...

John Ley

China Consumption Weekly (13 Jan 2025): NEV 2024, Tencent in Blacklist, Energy Monster Going Private

NEV retail deliveries grew by 41% in 2024, higher than 36% in 2023. US Department of Defense designated Tencent as a Chinese Military Company....

Ming Lu

EQD | Tencent – Call Buyers Haven’t Lost That Loving Feeling

​Investors remain optimistic about Tencent as put/call ratio shows no signs of panic. Implied vols have increased but are still below panic levels,...

John Ley

EQD | Tencent (700 HK) Option Strategy for Navigating a Volatile Market

​Tencent shares drop 7.3% after being labeled a Chinese Military Company by the US. This option strategy positions traders for further price swings.

Gaudenz Schneider

Tencent (700 HK): DoD Says Chinese Military Company; Not on NS-CMIC List Yet

The U.S. DoD has designated Tencent as a Chinese Military Company. The stock is not on the NS-CMIC list yet and could be added later. Addition to...

Brian Freitas

Investors remain calm despite majority of optionable stocks declining, with preference for Calls over Puts; Tencent dominates option trading...

Investors remain optimistic about Tencent as put/call ratio shows no signs of panic. Implied vols have increased but are still below panic levels,...

Tencent shares drop 7.3% after being labeled a Chinese Military Company by the US. This option strategy positions traders for further price swings.