To The Moon

I think the inverse ETF may not be able to hedge the risk of holding shares when the Hang Seng Index $HSI(HSI)$ is currently falling. 

And its investment cost is relatively high,...

it needs to copy the index through futures, there is the problem of rollover cost, and its management fee is relatively high. Regardless of whether it is hedging or short-term trading, using an inverse ETF does not count. On the contrary, it will be a better choice to do index options. 

Because the cost is very low, the fee for a Hang Seng Index option is only HK$0.54 for the SFC levy and HK$10 for the Exchange. More cost-effective than ETFs. Moreover, it is good to use index options to do light, and it is good to do hedging. There are more choices and strategies than reverse ETFs. 

For example, the current Hang Seng Index peaked and fell, but there will be support at 20,000 points. The 20,500-point put option on the Seng Seng Index can not only hedge risks by holding shares, but if the Hang Seng Index falls too much and falls sharply, the implied volatility of this put option will increase.

In addition to its own increase in disguise, Increases with increased implied volatility are also included. So the benefits are much better than inverse ETFs. In terms of risk, the maximum loss is only the amount of the purchased option, and the risk is controllable. Although inverse ETFs can also control risks, such as setting stop loss levels, etc. 

But after calculating the buried cost, you may lose more, and it is quite difficult to go back to your purchase price or even make money. On the contrary, we can choose the next month for the Hang Seng Index option, and it is calculated one by one. 

Every point up or down is 50 Hong Kong dollars, I think it would be more appropriate and cost-effective to do hedging or shorting.

@Tiger_chat @Daily_Discussion @TigerStars