Quantitative Researcher, MRM Research

Nico Rosti

Quantitative Researcher

MRM Research

Quantitative Research

Equity Derivatives

<ul>
<li>The <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">HSI INDEX</a> has been defying gravity, recently. It is up more than 30% from its most recent low.</li>
<li>In our previous, <a href="https://www.smartkarma.com/insights/hsi-to-find-strong-support-between-18-8k-and-17-5k-long-term-uptrend-set-to-restart" target="_blank" rel="noopener">Jan. 11th insight</a> we highlighted very precisely the support zone (18.8k-17.5k) from where the index was poised to resume its rally (the bottom was printed at 18671).</li>
<li>
Our models are currently indicating a very overbought condition. Leveraging the information relayed by <a href="https://www.smartkarma.com/profiles/gaudenz-schneider" target="_blank" data-smartkarma-citation="accounts:66501" rel="noopener">Gaudenz Schneider</a> in a recent insight, we think a "HSI PUT" could make sense here. </li>
</ul>


The HSI INDEX has been defying gravity, recently. It is up more than 30% from its most recent low.
In our previous, Jan. 11th insight we highlighted very precisely the support zone (18.8k-17.5k) from where the index was poised to resume its rally (the bottom was printed at 18671).

Our models are currently indicating a very overbought condition. Leveraging the information relayed by Gaudenz Schneider in a recent insight, we think a "HSI PUT" could make sense here. 


The HSI PUT: Hedging Strategies for an Overextended Rally

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Equity Bottom-Up

Zoomlion Heavy Industry H / Equity Bottom-Up

<ul>
<li>Hong Kong continues its secular bull market and has now reached its first significant resistance in the 24k to 25k.  Growth factor investing is leading in long-only investing.</li>
<li>Mainland buyers continue buying Hong Kong stocks at a historic rate with buying focused in the tech sector and specifically in AI-related companies.</li>
<li>
<a href="https://www.smartkarma.com/entities/zoomlion-heavy-industry-h" target="_blank" data-smartkarma-citation="entities:7817:1" rel="noopener">Zoomlion Heavy Industry H (1157 HK)</a> has broken its double-top formation and is at a new high.  <a href="https://www.smartkarma.com/entities/vtech-holdings-ltd" target="_blank" data-smartkarma-citation="entities:18812:1" rel="noopener">Vtech Holdings (303 HK)</a> broke out to a new high with improving momentum.
</li>
</ul>


Hong Kong continues its secular bull market and has now reached its first significant resistance in the 24k to 25k.  Growth factor investing is leading in long-only investing.
Mainland buyers continue buying Hong Kong stocks at a historic rate with buying focused in the tech sector and specifically in AI-related companies.

Zoomlion Heavy Industry H (1157 HK) has broken its double-top formation and is at a new high.  Vtech Holdings (303 HK) broke out to a new high with improving momentum.



Technically Speaking, Breakouts and Breakdowns: HONG KONG (March 6)

Derivatives and Quantitative Strategist

Gaudenz Schneider

<ul>
<li>
<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> put options show concentrated positioning at the 19,000 and 20,000 strike levels.</li>
<li>Traders continue to establish new positions approximately 15%-20% below current market levels, suggesting protection against major market corrections rather than minor pullbacks. The focus is on near-term risk.</li>
<li>Implied volatility has remained stable at 25-30% over the past two weeks, consistent with a broadly sideways movement in the index itself.</li>
</ul>



Hang Seng Index (HSI INDEX) put options show concentrated positioning at the 19,000 and 20,000 strike levels.
Traders continue to establish new positions approximately 15%-20% below current market levels, suggesting protection against major market corrections rather than minor pullbacks. The focus is on near-term risk.
Implied volatility has remained stable at 25-30% over the past two weeks, consistent with a broadly sideways movement in the index itself.


Hang Seng Index (HSI): Trends in PUT Strikes and Open Interest Visualized in Animation and Charts

<ul>
<li>Market traders of <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> call options maintain significant holdings in lower strikes, with notable concentration at the 20,000 strike level.</li>
<li>Open interest data reveals significant increase in open interest for 25,000 and 26,000 strike calls since late February, reflecting active trading as traders built new positions.</li>
<li>Despite increased trading activity and changes in market positioning, implied volatility has remained stable at 25-30% over the past two weeks, reflecting a consistent market sentiment.</li>
</ul>


Market traders of Hang Seng Index (HSI INDEX) call options maintain significant holdings in lower strikes, with notable concentration at the 20,000 strike level.
Open interest data reveals significant increase in open interest for 25,000 and 26,000 strike calls since late February, reflecting active trading as traders built new positions.
Despite increased trading activity and changes in market positioning, implied volatility has remained stable at 25-30% over the past two weeks, reflecting a consistent market sentiment.


Hang Seng Index (HSI): Trends in CALL Strikes and Open Interest Visualized in Animation and Charts

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

<ul><li>Three new Hong Kong SDRs, Xiaomi, Meituan, and Ping An Insurance, are now tradable on SGX, expanding thematic exposures.</li><li>HK SDRs offer cost-effective access to Hong Kong stocks with lower brokerage fees, no forex fees, and SGD settlements.</li><li>Since October 2024, HK SDRs' daily turnover increased eightfold to S$4 million, with significant trading in Tencent, BYD, and Alibaba.</li></ul>

Three new Hong Kong SDRs, Xiaomi, Meituan, and Ping An Insurance, are now tradable on SGX, expanding thematic exposures.HK SDRs offer cost-effective access to Hong Kong stocks with lower brokerage fees, no forex fees, and SGD settlements.Since October 2024, HK SDRs' daily turnover increased eightfold to S$4 million, with significant trading in Tencent, BYD, and Alibaba.

HK SDR suite broadens to track over 40% of Hang Seng Index with Xiaomi, Meituan and Ping An Insurance

China

Xiaomi Corporation manufactures communication equipment and parts. The Company produces and sells mobile phones, smart phone software,  set-top boxes, and related accessories. Xiaomi markets its products worldwide.

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Xiaomi (1810 HK)

The HSI PUT: Hedging Strategies for an Overextended Rally

The HSI Index is defying gravity, up over 30% from its recent lows, but our models suggest it is very overbought, indicating a potential...

Nico Rosti

Technically Speaking, Breakouts and Breakdowns: HONG KONG (March 6)

Hong Kong continues its secular bull market outperforming global markets over the last year. After advancing more than 20% this year, the market...

David Mudd

Hang Seng Index (HSI): Trends in PUT Strikes and Open Interest Visualized in Animation and Charts

Traders are heavily positioned in Hang Seng Index put options at 19,000 and 20,000 strike levels, indicating protection against major market...

Gaudenz Schneider

Hang Seng Index (HSI): Trends in CALL Strikes and Open Interest Visualized in Animation and Charts

Traders of Hang Seng Index call options maintain significant holdings at lower strikes. Increased interest in 25,000 and 26,000 strikes

Gaudenz Schneider

HK SDR suite broadens to track over 40% of Hang Seng Index with Xiaomi, Meituan and Ping An Insurance

Three new Hong Kong SDRs, Xiaomi, Meituan, and Ping An Insurance, are now tradable on SGX, expanding thematic exposures. HK SDRs offer...

Singapore Exchange Ltd (SGX)

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

The HSI PUT: Hedging Strategies for an Overextended Rally

​The HSI Index is defying gravity, up over 30% from its recent lows, but our models suggest it is very overbought, indicating a potential...

Nico Rosti

Technically Speaking, Breakouts and Breakdowns: HONG KONG (March 6)

Hong Kong continues its secular bull market outperforming global markets over the last year. After advancing more than 20% this year, the market...

David Mudd

Hang Seng Index (HSI): Trends in PUT Strikes and Open Interest Visualized in Animation and Charts

​Traders are heavily positioned in Hang Seng Index put options at 19,000 and 20,000 strike levels, indicating protection against major market...

Gaudenz Schneider

Hang Seng Index (HSI): Trends in CALL Strikes and Open Interest Visualized in Animation and Charts

Traders of Hang Seng Index call options maintain significant holdings at lower strikes. Increased interest in 25,000 and 26,000 strikes

Gaudenz Schneider

HK SDR suite broadens to track over 40% of Hang Seng Index with Xiaomi, Meituan and Ping An Insurance

Three new Hong Kong SDRs, Xiaomi, Meituan, and Ping An Insurance, are now tradable on SGX, expanding thematic exposures. HK SDRs offer...

Singapore Exchange Ltd (SGX)

The HSI Index is defying gravity, up over 30% from its recent lows, but our models suggest it is very overbought, indicating a potential...

Traders are heavily positioned in Hang Seng Index put options at 19,000 and 20,000 strike levels, indicating protection against major market...