Weekly Top Ten Equity Derivatives – Jul 20, 2025

1. Nikkei225 and Election: Hedging Activity and Implieds Flag Opportunity

By John Ley, Clifton Derivatives

• Upper House elections are drawing increased scrutiny due to heightened focus on fiscal finances.
• We examine how risk is being priced across Japanese markets and in particular in Nikkei225 options.
• Volatility risk appears asymmetric, and we outline ways to mitigate or potentially profit from it.

2. Meituan (3690): Full Round-Trip, Surge in Call Volumes Provide Strong Trade Setup

By John Ley, Clifton Derivatives

• Meituan has completed a full roundtrip from its 2024 rally and is now back near key support.
• Option traders have taken notice, with a notable pickup in activity—especially for Calls.
• We outline two trade structures depending on directional or vol views.

3. BYD (1211 HK) Outlook Under Pressure as Sales Momentum Fades

By Nico Rosti, MRM Research

• BYD (1211 HK) fell for longer than expected since our last insight was published. We said that if BYD was going to fall below 120, the trend would become bearish.
• The stock did not fall a lot, it briefly reached below our 120 support level (75% probability of reversal), but has been down for 5 weeks. It is oversold.
• The big question now is: can BYD recover and start to trend up again? Or are we going to see a small bounce from oversold levels, followed by lower prices?

4. Hong Kong Financials in Focus: Sub-Sector Option Volumes Reveal Emerging Themes

By John Ley, Clifton Derivatives

• Volume trends and sub-sector splits highlight where interest is most concentrated.
• We revisit top names that appeared prominently in last week’s active lists
• Trading patterns suggest a mix of positioning motives across Financial names.

5. Nikkei 225 Index Outlook: Bullish, Possibly Directed Past 41k

By Nico Rosti, MRM Research

• The Nikkei 225 (NKY INDEX) bounced this week, after 2 weeks down, after previously reaching a peak at 40852, the area above 41k has been a strong barrier since 2024.
• Our model says the current Nikkei 225 trend could rise to 41k, or even above 41k.
• The index’s latest 2-week pullback was shallow and did not even reach our model’s Q2 support level, this is a bullish behavior (buy the dip).

6. Global Markets Tactical Outlook: Week of July 14 – July 19

By Nico Rosti, MRM Research

• A quick synoptic look at the tactical models for some key indices, stocks, commodities and bonds we cover, for the week July 14 – July 19.
• The most noticeable highlights are: all US markets and stocks we cover sold off last week, apart from Amazon.com (AMZN US) , Alphabet (GOOG US) and NVIDIA Corp (NVDA US) 
• In Asia, BYD (1211 HK) is very oversold, and Fast Retailing (9983 JP) is also oversold. Gold (GOLD COMDTY) and Crude Oil (CL1 COM COMDTY) start to be overbought.

7. TSMC (2330.TT) Outlook Post Strong Q2: Our Model Says “EXTREME OVERBOUGHT CONDITION”

By Nico Rosti, MRM Research

• As reported by Patrick Liao and William Keating , Taiwan Semiconductor (2330 TT) is currently in very good shape, for multiple reasons, I invite you to read their insights. 
• The problem is: the stock closed at 1155 on Friday, blowing past through the roof of what our model has identified as a very extremely overbought “Tails” move.
• We said BUY in June, and know market euphoria can defy models when sentiment takes over, but our tools consistently flag overstretched conditions — a clear caution to late-stage buyers!

8. BSE Derivative Volumes Hit by Jane Street Ban, Volatility Slump: EPS Cuts & Near-Term Downgrade

By Sudarshan Bhandari, Beat the Street

• BSE’s Option Premium ADTO in July MTD is down 25% MoM to INR 105bn amid lower market volatility and regulatory overhang from SEBI’s ban on Jane Street.
• This weakness has triggered another 6–8% volume cut assumption in the market, on top of the 4–5% volume cut in June 2025.
• BSE will face pressure in the near-term due to lower volume and valuation pressure, but long-term optimism tied to earnings if volumes normalize and reforms push investors toward cash equities.

9. GOOGL: Q2 Vol Pricing, Performance Trends, and Earnings Setup

By John Ley, Clifton Derivatives

• GOOGL is set to release Q2 earnings on Wednesday, July 23 after the close, having rallied 15.39% since Q1 results.
• Q2 has historically delivered strong average returns and the largest average absolute 1-day move.
• We explore how volatility and past earnings reactions frame expectations for the upcoming release.

10. HDFC Bank (HDFCB IN) Outlook: Any Rally From Here May End Quickly

By Nico Rosti, MRM Research

• HDFC Bank (HDFCB IN) has been rallying strongly since early January 2025, a rally we predicted back then. After 2 weeks down, the stock this week is rising.
• However, according to our model the current uptrend pattern does not lead to long-lasting rallies, but rather to new, short-term corrections.
• The time horizon for this rally is 1-2 weeks, when this trend pattern is encountered, so we could expect the stock to rally briefly and then pull back again.