$Hong Kong Exchanges and Clearing(00388)$
Hong Kong & China stocks have been rallying ever since
1. China changed covid policy
2. Crackdown For china tech sector changed to support
Besides the usual suspects for china reopening like $Alibaba(BABA)$ $TENCENT(00700)$ , another consideration could be $Hong Kong Exchanges and Clearing(00388)$
Why so?
Hong Hong exchange business is effectively a monopoly for those funds that have no access to China and are not able to invest in China ADR Or OTC stocks. This is very strongeconomic moat as they can control pricing lower.
The current results are bad, especially when we consider the damage to Hong Kong markets due to political issues, covid lock downs, china property worried and of course china tech sector crackdown.
However, these headwinds are either gone or even turning into tailwinds.
What does means is that funds that previously left hong Kong markets will flow back in.
In addition, ipos will likely revive again, further bringing more activity and revenue for hk ex.
I had been personally increasing my positionin Hk ex through selling put options.
Why sell put options instead of directly buying shares?
I am getting uncomfortable with the current run up. I feel that it could be too fast and too strong, there could be a pull back before prices continue up again.
As such, by selling put options at hk$350, i willbuy at hk$350 if hk ex drops to hk$350 or below. It's effectively a discount over buying shares at current price of hk$368.8.
As I am still bullish on hk ex, if stock price maintains above hk$350 or even rallies, I will pocket the premiums collected, which equates to hk$927 per contract.
Price fall, I buy at discount, price rally, I get paid. What's not to like about options. [Cool]
Lets see How it plays out. [Victory]
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