This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Derivatives on Smartkarma.
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1. Alibaba Drops 8%: What Friday’s U.S. Sell-Off Means for Hong Kong Stocks
- Context: Friday’s sell-off occurred after the Hong Kong market closed, but several Hong Kong–listed companies were caught up in the rout through their U.S.-listed ADRs.
- This Insight details the impact on 15 prominent Hang Seng Index constituents — including Alibaba, Tencent, and HSBC. Implied volatility in U.S.-traded options on these ADRs moved sharply in response.
- Why Read: Understand what to expect when the Hong Kong market reopens after the weekend — both in terms of price performance and implied volatility.
2. Market Sell-Off (Oct 10): How Asian Index ETFs Responded to Market Slide
- A renewed tariff threat from Trump sparked a sharp, sell-off across North American Equity markets.
- The sell off was broad based and accordingly we look at the performance of Asian Index ETF’s that trade in North America to help prepare for Monday’s price action.
- Implied volatility, price and option volume are displayed for each symbol.
3. Nikkei 225 (NKY) Tactical Outlook: Flying Too High…
- The Nikkei 225 (NKY INDEX) has reached eye-popping valuations, a 20% rally from the end of June into early October (40k to 48k).
- Our forecast is always short-term, 3-5 weeks horizon, so we cannot say if the index will continue to rally in 2026, but right now it’s OVERBOUGHT.
- We expect a pullback soon, you can buy the pullback, we discuss the support areas in the insight.
4. HSI Tactical Outlook: Maybe It Is a Large Pullback…
- In our previous insight dedicated to the Hang Seng Index we formulated a key question: is this going to be a small pullback or a large pullback?
- The HSI pulled back just for 1 week, small pullback, our models were reset. But this week the index pulled back again, almost reaching Q2 support (mildly oversold).
- Then, on Friday, Trump tweeted something against China, after the Asian markets closed and all hell broke loose. The HSI Oct. futures tanked to 25300. Let’s discuss support zones…
5. Amazon: Still Riding the Tech Volatility Wave
- Amazon is navigating a dynamic tech landscape, leveraging its strong position in AI infrastructure and cloud services to drive long-term value creation and maintain a premium valuation in the market.
- The company is making strategic investments in AI chips and foundational AI companies like Anthropic, aiming to optimize efficiency and scalability in its AWS segment.
- Despite a current range-bound stock price, Amazon’s financial metrics and company culture approach underscore its commitment to growth and competitive advantage in the evolving tech ecosystem.
6. Cheap Vs. Rich Volatility: Diverging Signals Across Alibaba (9988 HK), Tencent (700 HK) & The HSI
- Context: Volatility cones provide a straightforward framework to evaluate whether options are trading cheap or rich. This Insight provides volatility analysis for 8 prominent Hong Kong stocks and the benchmark index.
- Highlights: In contrast, Alibaba’s IV remains rich, while Hang Seng Index IV is cheap across the curve, offering attractive hedge entry points.
- Why Read: Spot opportunities, assess regime shifts, and manage risk effectively — volatility cones turn complex data into actionable insights for traders and investors.
7. Monthly Macro Markets (October): Diverging Volatility Trends Highlight Risk Sensitivity
- October seasonals, despite their reputation, show most markets with better than 60% odds of finishing higher albeit with meager returns.
- Volatility trends have diverged, with implied vols climbing even as realized vols fell, raising questions about early signs of risk sensitivity.
- Implied vols on most markets have been trending higher vs the SP500 despite the US being ground zero for policy uncertainty.
8. Hong Kong Single Stock Options Weekly (Oct 06 – 10): Options Calm But Stormy Seas Ahead
- Hong Kong equities erased last week’s gains, with further losses on Monday likely after Trump’s social media post Friday morning.
- Weakness was not widespread, though there was a sharp reversal in breadth week over week.
- Option volumes and ratios suggest there’s little concern in the market at this point.
9. Tactical Alert: Undervalued Stocks Poised to Rally This Week
- China Mobile (941 HK) and Meta (META US) are both oversold according to our quantitative tactical models.
- We have been discussing China Mobile (941 HK) before, in early September, we said the pattern was bearish (“brief rally then down again”) , but now this has changed.
- Meta (META US) is a different story, looks like a bearish pattern but it is very oversold, it could rally 2 weeks before going lower.
10. From Banks to Miners: Cheap Vs. Rich Volatility Across Australia
- Context: Volatility cones provide a straightforward framework to evaluate whether options are trading cheap or rich. This Insight provides volatility analysis for ten prominent Australian stocks and the benchmark.
- Highlights: December implied volatility tends to be rich for the banks and cheap for the miners. S&P/ASX 200 (AS51 INDEX) implied volatility is cheap across the curve.
- Why Read: Spot opportunities, assess regime shifts, and manage risk effectively — volatility cones turn complex data into actionable insights for traders and investors.
