This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Derivatives on Smartkarma.
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1. BYD (1211 HK) Placement: Tactical Buy Opportunity in Key Support Zone
- As recently written by Brian Freitas and Sumeet Singh , BYD (1211 HK) is placing new shares on the market at at a price range of HK$333-345/share.
- The stock today dropped to roughly 340 and it’s oversold WEEKLY according to our models. Buying here, at this price, should bear fruit in coming weeks. More details below.
- We cannot yet predict the profit targets because our model needs the WEEKLY Close for this week, to do that. We will update this information when it becomes available.
2. JD.com (9618 HK) FY Earnings on 6 March: Divergence Between Option-Implied And Historic Move
- JD.com (9618 HK) upcoming Q4 and Full Year 2024 results announcement on 6 March historically triggers significant stock volatility, with full-year announcements causing 12-14% price movements.
- Options market pricing implies a 9.4% post-announcement move (up or down), which is less than previous full-year announcement reactions but nearly double the average quarterly announcement impact.
- Long Straddle positions break even at 9.2% price movements, appearing expensive compared to quarterly announcement history but potentially profitable based on full-year announcement patterns.
3. Hong Kong Single Stock Options Weekly (Feb 24 – 28): Broad Deterioration
- Broad based weakness, less than ½ of optionable stocks were up on the week with the average size of losses larger than average size of gains.
- Total single stock Put option volume the highest in the past 4 months pushing the Put/Call ratio to a local extreme.
- Laggards from the rally holding on, rally leaders broadly weak.
4. META: The Last of the Mohicans Standing – A Buy Opportunity
- All but one of the Magnificent 7 stocks have seen their rallies collapse, breaking their long-term uptrends. The lone exception? Meta Platforms (META US).
- Mark Zuckerberg’s company is the only Magnificent 7 stock that has pulled back yet may still be holding its uptrend intact.
- Our model has identified a tactical BUY opportunity in the support price area around 640. Keep reading for the details…
5. The Beat Ideas: Laurus Labs
- The company is expected to see multiple capacity expansions coming online in FY26, with ramp-up occurring throughout FY26 and FY27 onwards.
- Currently, execution challenges and unavoidable delays have impacted the company’s revenue and margin trajectory, resulting in depressed margins on a short-term basis.
- As new projects come online and product ramp-ups occur, it expects revenue and margin expansion, ultimately reflecting in the bottom line due to the increased gross block & new products.
6. Alibaba (9988 HK): Trends in CALL Strikes and Open Interest Visualized in Animation and Charts
- While Alibaba Group Holding (9988 HK) rallied, lower in-the-money calls were closed, realizing gains, while higher out-of-the-money strikes gained popularity.
- The median strike price lagged the sharp increase in stock price. The median strike currently stands at 107.50.
- With 81% of March calls currently in-the-money and higher strikes trading at premium implied volatility, active trading is expected in the 150-170 strike range.
7. Alibaba (9988 HK): Trends in PUT Strikes and Open Interest Visualized in Animation and Charts
- As Alibaba Group Holding (9988 HK) rallied, put strike distribution remained largely unchanged with median strikes only rising from 80 to 85, pushing protection increasingly deep out-of-the-money.
- With most puts now deep out-of-the-money, active trading is expected in the 120-140 strike range.
- The deep out-of-the-money put strikes trade at a significant premium to at the money implied volatility. The 130 strikes trade below, offering an opportunity for an effective hedge.
8. The HSI PUT: Hedging Strategies for an Overextended Rally
- 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.
9. NIFTY Set for a Modest Rally from Current Lows
- Our latest insight on the NIFTY Index (NIFTY INDEX) recognized the possibility of obstacles against a rally from the index’s lows.
- The index has fallen for another 2 weeks from there, now it is very oversold and a relief rally could begin this week or the next.
- Profit targets for this relief rally are in the 23100 area, but unfortunately the forecast is maximum 3 weeks up, not really a bullish pattern…
10. Hang Seng Index (HSI): Trends in PUT Strikes and Open Interest Visualized in Animation and Charts
- 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.
