Bulls bet big on these three China-related stock trades during Trump visit
President Donald Trump and a delegation of American business leaders descended on Beijing on Wednesday to meet with Chinese leader Xi Jinping, and market bulls are following suit.
China stocks, ETFs and related themes posted some of their biggest gains in months. Shares of the e-commerce giant Alibaba’s Despite the morning snow report meeting most expectations, it rose 8%, leading to a 2.5% rise. iShares China Large-Cap ETF (FXI).
Alibaba, 5 days
More than 75,000 calls were purchased compared to fewer than 12,000 puts, according to ThinkOrSwim data, with nearly five times as many calls as puts on Alibaba. According to SpotGamma, 88% of the $160 million in options premium traded as of noon Wednesday were calls.
China-based ETFs were even more concentrated. KraneShares China Internet ETF It was among the 10 most traded securities by option volume for much of the day, with more than 750,000 contracts traded and nearly all of the premium — $48 million of $50 million — coming from calls. Nine of the top 10 trades by dollar amount were put calls, and the most popular contract by volume was the 32-strike put that expired on Friday.
“There has been a noticeable increase in discussions about the potential for a short-term contraction in KWEB and renewed momentum in BABA,” Neil McDonald, CEO of Moomoo, a powerful trading platform in Asia, said in an email. he said. “Many retail traders are calling this the ‘Trump effect’ on BABA, reflecting expectations that improved US-China dialogue could act as a catalyst for Chinese tech names that have been lagging for months.”
A surprise winner in the theme: fordmotor, Its shares rose 13% after a Morgan Stanley analyst said the automaker’s energy storage licensing deal with China’s Contemporary Amperex Technology CATL could be a positive catalyst.
Ford’s 5 days
Options on Ford were largely bullish, with calls trading more than five times as long as calls and more than twice as many calls being sold. One notable trader purchased 7,000 of the $16.85 forwards expiring in January of next year for $245,000; that’s a bet that the stock will be up more than 25% so far.
