To The Moon

Judging by recent options moves, the May sell charm may be directed not only at market trends but also institutional orders. The moves in individual stock options in recent days have not been very guiding, giving me the feeling that I went to the lake to switch positions and got nothing. Not until yesterday did a fish bite the hook, copy up to see, this fish is really very strange: sell $KWEB 20230915 28.0 CALL$ An institution sold the call of KWEB option with an exercise price of 28, the expiration date is September 15, and the total amount of the order is 2.54 million. This is a standard one leg sell call large order, traders see KWEB below $28 through September 15th, or a sustained sideways movement that never breaks through 28. The problem is that KWEB is currently trading at $28, which is also a low support price. sell call28 before September, meaning that the stock before Q4 is difficult to improve. Instead of buying put, the trader may see little downside and a huge loss of time for the buyer. But the puzzle is that option sellers usually leave plenty of room to move. If the strike price is 32, or the expiration date is 6.16, that makes sense to me. Why is he so sure China will underperform in the next four months? Instead of buying put, the trader may see little downside and a huge loss of time for the buyer. But the puzzle is that option sellers usually leave plenty of room to move. If the strike price is 32, or the expiration date is 6.16, that makes sense to me. Why is he so sure China will underperform in the next four months? When it comes to the performance of the whole plate, only one order cannot explain the problem. If Chinese stocks do poorly in the future, there will be other bets, and sure enough, the Hong Kong ETF has also seen options change today: $FXI 20231117 28.0 PUT$ A different program judged this large order to be the seller. In other words, the trader sold the put of FXI with the strike price of 28 and the expiration date was November 17th. By the time of press release, 25,000 lots were traded, and the total transaction amount was about 4.5 million. Sell put means that traders prefer FXI not to go below 28 until mid-November, with little room for downside movement. It could also mean a lack of upside momentum and a continued sideways trend around 28. That is, if the big order is really the seller. A different program judged this large order to be the seller. The logic goes like this: if the closing price is close to the asking price, then the large order is judged to be the seller's closing price. Those of you who have experience in trading know that selling is easier when the order price is closer to buying. If the closing price is close to the selling order, the large order is usually judged to be the buyer's. But with less liquid options, sometimes the put price is inflated a lot, sometimes it's close to the buy and it's judged to be the seller because the price is too far away from the asking. I checked the transaction order at that time and found that when the program judged the trader to sell, the asking of this large order was 1.9 ~ 1.95, which was obviously inflated. Judging from the transaction price in the screenshot, I was more inclined to the buyer of this large order: If $FXI 20231117 28.0 PUT$ is a buy order, it is logically close to sell $KWEB 20230915 28.0 CALL$ . Of course, the combination of sell call and sell put is not bad, but the long-term ATM sell put is too positive, while the long-term ATM sell call is too negative, I don't know whether you can understand this difference. With so much in front, the biggest question is: If the future trend of China concept sector is discussed on the basis of sideways, why do institutions think China concept stocks will move sideways in the next few months? The answer is the strong US dollar, which is the headline answer, and Hong Kong and China stocks are highly correlated with the exchange rate. Compared with the trend of US dollar/RMB, it can be found that it is highly consistent with the trend of Chinese and Hong Kong stocks, especially when it is above 7. Then considering the recent continued strength of the US dollar, the trend of China concept stocks and Hong Kong stocks is bound to be very heavy pressure. So from the perspective of exchange rate, no matter the FXI big order is sell put or buy put, want to long China concept and Hong Kong stocks had better wait for the US dollar back.