just thought of something to do first thing Monday morning market open, HKG, and LDN, and then NYC.
exactly what dunno, but at least ...
buy Put options in HK
(1) dollar for dollar HK market generally cheaper than US, but on global macro issues, HK market can lead as well as follow US market, depending of whether the Boyz at GS, MS etc saw it coming or not, whether leading or reacting
(2) however, even as HK market also features options, the options trades mostly at discount to US market, volatility for volatility, because retail does not really trade HK options in any size
(3) IOW, it does not really pay, as a rule, to short HK calls and puts
(4) However, by same logic, says must consider buying HK options at turnings, especially if on indices
(5) For shares, as an example
(5-i) EBay share trading at ~52.5, w/ implied volatility of 35%, and for put option strike 50.50 (~4% below the money), the October 30th put can be had (Friday) at $1.80, or ~3.5% of 52.50
(5-ii) Alibaba (9988.HK) share trades at ~HK$ 260, w/ implied volatility of 34.5%, arguably a more substantive company, and for put option strike 250 (~4% below the money), the October 29th put can be had (Friday) at HK$ 7.20, or 2.80%
so, should one believe the global market is going to take a drubbing for all the same reasons, more or less, on a Sunday, and HK proxy market (as opposed to that odd Tokyo game room) should do for get-go put option volatility shopping, because the same volatility change should ripple across the planet, am guessing, especially as the same volatility change is under-priced / under-appreciated on the HK exchange
Option is a relatively new 'thing' in HK.
Must think more and dialogue w/ my betters. |
