Weekly Top Ten Equity Derivatives – Feb 24, 2025

1. Alibaba (9988 HK): How Options Traders Are Navigating the Rally and Volatility. Top Trades.

By Gaudenz Schneider

• This Insight analyses Alibaba Group Holding (9988 HK) tailor-made option strategies traded over the last five trading days on the Hong Kong Exchange. Strategy highlights and volatility context are provided.
• These traders tailor structures to risk budgets and take calculated bets. Several large box trades appeared on the ticker.
• Expect more movement on Alibaba Group Holding (9988 HK)‘s Q3 earnings announcement tomorrow, 20 February 2025. Option-implied move at the end of this Insight.

2. Alibaba – How to Position Post Earnings Amid Sticky Volatility

By John Ley, Clifton Derivatives

• Alibaba had a super charged move this week, risking 14.56% on its earnings release.
• We look at how price movement and volatility evolve in the month after earnings releases.
• Recommendations are made on how to position through options in this environment of enhanced volatility.

3. NIFTY Poised to Reignite Its Uptrend, But Faces Short-Term Obstacles

By Nico Rosti, MRM Research

• It has been a 5-months journey for the NIFTY Index (NIFTY INDEX) , from its last peak in September 2024, to its current lows.
• Our WEEKLY model indicates a (mildly) OVERSOLD state (Friday at Close, 22929). If the index pulls back a bit more, it’s a BUY but keep reading…
• Our tactical short-term model has found limited upside for the NIFTY at the moment, so the long-waited restart of the uptrend may be a bit bumpy.

4. HSI Index Options Weekly (Feb 17-21): Alibaba Reignites Momentum

By John Ley, Clifton Derivatives

• The scorching rally continues with Alibaba saving a lackluster week with huge earnings driven move on Friday.
• Implied vols are in the 85th percentile and struggling to move higher with spot.
• Third week in a row where Call volume as a percent of total slipped indicating that buying fatigue might be setting in.

5. Xiaomi (1810 HK) – Riding the Wave. How Option Traders Navigate. Top Trades Analyzed.

By Gaudenz Schneider

• This Insight analyses Xiaomi Corp (1810 HK) tailor-made option strategies traded over the last five trading days on the Hong Kong Exchange. Strategy highlights and volatility context are provided.
• These traders tailor structures to risk budgets and take calculated bets. Strategies are mostly bullish, and exclusively long volatility despite implied volatility in its 98th percentile.
• Call spreads can indicate where bullish traders expect the rally, driven by its own momentum, to peak. One trade suggests a ceiling of 70 by mid-year.

6. Kospi Index Options Weekly (February 10 – 14): Call Volumes Rebound

By John Ley, Clifton Derivatives

• Very low volatility rally with Kospi up 2.63% but still 7% below the 52-week high.
• Implied vols moving in opposition to the rally, dropping 1 point on the week.
• Call volumes rebounded significantly with the most active Call strike trading more than twice as much as the most active Put strike.

7. HSCEI Index Options Weekly (Feb 17-21): Implied Vol Weak Despite Rally

By John Ley, Clifton Derivatives

• HSCEI sets a new 52-week high, helped in part by the large earnings related move from Alibaba to finish the week.
• Implied vol struggling to keep up with the rally in spot, dropping 3 points despite Friday’s furious rally.
• We show how the relationship between spot and vol over the past month has not been the norm compared to the previous year’s activity.

8. KOSPI 200 – Upcoming BOK Rate Decision: Navigating Market Moves and Profit Opportunities

By Gaudenz Schneider

• The Bank of Korea is expected to cut interest rates to 2.75% on 25 February 2025. The decision, however, is not expected to be unanimous and some analysts argue against.
• Historical data from 120 BoK announcements and subsequent moves in the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX EQUITY) is examined.
• Options market pricing seems to lean toward a “surprise and no-change” outcome. Traders can seek opportunities with short straddles or long puts depending on anticipated outcomes.

9. Hong Kong Single Stock Options Weekly (February 17 – 21): Option Volumes Surge as Rally Narrows

By John Ley, Clifton Derivatives

• Mixed bag with narrowing participation, widening distribution of returns but with the highest total option volume since November.
• Option volumes over the past 2 weeks are 80% higher than the prior 3-month average.
• Implied vols weaker across the board with 9 of 11 sectors seeing softer implieds.

10. Nikkei Index Options Weekly (Feb 17 – 21): USD/JPY at Inflection Point

By John Ley, Clifton Derivatives

• The 150 level on USD/JPY seems to be an area of heightened interest. We see potential for greater disparity of Nikkei returns below this level.
• Nikkei 1-month implied vol is at the 17th percentile; while not currently monetizing, caution is warranted on short vol positions as USD/JPY vol trends higher.
• Call volume dropped sharply vs total volume, with Puts outpacing Calls every day this week.