To The Moon

Chinese Stocks:

In less than two weeks, Chinese stocks have reached targets that typically take 2 months, leaving observers in awe. More importantly, this may become the new norm going forward, similar to Tesla's move in June. Widespread mobile usage and efficient fund transfers have enabled capital to be deployed at unprecedented speeds. Experts will likely author books coining terms for this phenomenon.

Currently, the ETF flows hold limited reference value. For KWEB, it's mostly outright call buyers taking profits and rolling, redeploying a portion of gains without hesitation. For FXI, many are covered stock holders, but notably, some major flows sold far-dated at-the-money calls like $FXI 20241220 33.0 CALL$ , suggesting some institutions view current prices as having reached targets.

For individual stocks, there is significant near-term divergence. Pinduoduo for example has both bulls and bears, with flows seeming more day-trade oriented.

So what's the go-forward plan? We need to revisit the core uptrend in A-shares and assess its sustainability. Personally, I believe there is further upside, but the potential for a pullback and its magnitude are difficult to gauge.

Those holding stocks can be patient, but those not yet positioned face more urgency.

Notably, I observed significant volume in the long-dated at-the-money $40 calls on the 3x leveraged Direxion China Bull ETF ($YINN 20260116 40.0 CALL$ ). Not sure if institutional or retail, but the sporadic trade entries suggest retail, though leveraged ETF options are generally illiquid.

A reminder that 3x leveraged ETFs carry remote but real risk of getting completely wiped out, as their underlying structures differ from stocks. Those trading these products aggressively need to be aware of the risks.

$Nvidia (NVDA)$
Institutions rolled their covered call spread position for next week:
Sold $NVDA 20241011 120.0 CALL$ 
Bought $NVDA 20241011 124.0 CALL$ 

$Tesla (TSLA)$
Institutions rolled their $270 covered calls to next week:
Sold $TSLA 20241011 270.0 CALL$ 

The delivery report missed expectations, so unfortunately Goldman's contrarian bullish call was more accurate. However, the $270 strike roll suggests further upside towards that level is expected. Current prices seem conducive for selling puts, with the $220 strike as a potential strike.