To The Moon

Not a moment wasted mourning the triple witching day, as large April put orders on Chinese stocks have already hit the market!

I initially wanted to reflect on the triple witching day, but considering it’s been thoroughly discussed over the past three weeks, there’s little left to add. If open interest on monthly options becomes too heavy, the market tends to adjust ahead of time, with everything settling on expiration day itself.

There are always noteworthy developments to watch during the week, such as how the clear targets of triple witching day attract excessive arbitrageurs, causing certain strike prices to skyrocket. While arbitrageurs often focus on out-of-the-money options, their activity can still lead to some market volatility.

The April Show: Chinese Stocks Under Pressure

The highlight for April lies in bearish bets on Chinese stocks. Large orders include put buying on $FXI$ and call selling on $KWEB$. The expiration for these orders is set for April monthly options, signaling a clear expectation of a pullback within that timeframe.

However, rather than a simple pullback, I think a more accurate description is deleveraging. Many investors are eager to enter the market, and a significant correction would feel too much like charity. Instead, dragging things out achieves two goals: wearing down leveraged positions and making it harder for new players to enter easily.

We’ll have to see how things unfold, but it’s looking like a battle of attrition. The bears will gradually enter the scene over time.

For now, a sell call strategy seems more reliable, as it covers both sideways and bearish trends.

$iShares China Large-Cap ETF(FXI)$

Large order on the floor: Buying 34 puts expiring in April

• Contract: $FXI 20250417 34 PUT$ 

• Volume: 55,300 contracts

• Notional Value: $1.16 million

$KraneShares CSI China Internet ETF(KWEB)$

Large order on the floor: Selling 37 calls expiring in April

• Contract: $KWEB 20250417 37.0 CALL$ 

• Volume: 22,000 contracts

• Notional Value: $2.84 million

$X-trackers Harvest CSI 300 China A-Shares Fund(ASHR)$

Large order on the floor: Holding both shares and options

• Contract: $ASHR 20250417 28.0 CALL$ 

• Volume: 10,000 contracts

• Notional Value: $430,000

As for the direction of this trade, I’m somewhat skeptical. There’s a chance this is a covered call.

$PDD Holdings Inc(PDD)$

Pinduoduo’s situation is more complex, with long and short positions battling it out. It feels like there’s an information gap here. The bears are clearly betting on a pullback, but what are the bulls buying?

• Buying puts: $PDD 20250425 128.0 PUT$ 

• Mixed activity on calls: $PDD 20250425 145.0 CALL$  (both buying and selling, with large bearish orders on the floor)

• Buying calls: $PDD 20250620 135.0 CALL$ 

The last one, theoretically, looks fine, but it’s a high-risk, high-reward move—hurting both sides in the process. Someone’s bound to lose big here.

$NVIDIA(NVDA)$

Let’s start with the 5-day closing data. The volume of put closures far exceeds that of calls this week. This shows that earlier straddle buyers have been closing their positions, suffering heavy losses.

Back on January 30:

• The $122 call$ ($NVDA 20250321 122.0 CALL$ ) was bought for $12. It’s now worth only $0.04.

• The $122 put$ ($NVDA 20250321 122.0 PUT$ ) was bought for $11. It’s now worth $5.

The bears were very close to succeeding this time. They specifically targeted post-earnings and a market pullback, spreading rumors to create panic and force bulls to close out. If an additional black swan event had occurred, the stock could have dropped to $90. But alas, it didn’t happen. However, this scenario could repeat later this year.

This pullback made me realize that the bears aren’t just passively waiting for opportunities—they actively leverage timing and external factors to crash the market. So, when the market is weak, it’s okay to play it safe, especially since some players will take advantage of the situation.

Looking at open interest rankings, April is expected to remain volatile, but earnings season should offer some support. Anticipated ranges: $100–$130. For next week, the range should be similar to this week’s: $110–$124. While it’s possible next week’s low could dip below $110, the market should rebound by the end of the month or early April. Bold traders can continue selling $110 puts, while cautious ones might opt for strikes below $110.

$Tesla Motors(TSLA)$

Pay attention to April 220 puts ($TSLA 20250404 220.0 PUT$ ).

• New positions: 20,000 contracts

• Split between buyers and sellers.

Theoretically, I lean toward a bullish view for early April, expecting a broader market rebound. However, if delivery reports continue to disappoint, bearish bets also make sense. This is worth watching next week.