These Are the Best Chinese Stocks and ETFs to Trade
These Are the Best Chinese Stocks and ETFs to Trade
They’re looking good because of monetary easing by the People's Bank of China
Chinese Exchange-Traded Funds:
• FXI, which offers exposure to large-cap Chinese companies in a variety of sectors, including technology.
• KWEB, with its focus on publicly traded Chinese internet and technology companies.
• ASHR, which provides exposure to China’s A-shares market, tracking the CSI 300 Index.
Chinese Stocks:
• JD.com (JD), is a major e-commerce platform.
• Pinduoduo (PDD) provides an e-commerce platform.
• Alibaba (BABA) engages in e-commerce, cloud computing and other technology-driven services.
• Baidu (BIDU) offers internet-related services, including search engines and AI applications.
Thomas Westwater wrote an article on the reasons behind the Chinese Central Bank's actions. You can see it here.
A volatility spike in October?
October tends to get higher volatility. See below for the past seven years.
Two Trade Ideas
PDD ($138) Iron Condor (NOV) $3.80cr
PDD, BABA and BIDU—the most-liquid China stocks available to trade—have an IV north of 50%, compared to FXI or KWEB at around 40%. Theprbs move has been incredible, and the space is up 20%-30% in just the last couple of weeks.
If you think it might be a bit overdone, an iron condor plays into the high volatility and the potential sideways move. Short the 120/105 put spread with the 160/175 call spread trades at $3.80 with an 80% probability of profit (POP).
COIN ($170) Short Put Spread (NOV) $4.54cr
Flight to quality was all the rage this morning, with gold and silver reaching near highs and bonds bouncing higher. Bitcoin has had a nice run but has given up some ground over the last two sessions. COIN is a high beta bitcoin play—if you think there’s a bounce, the 150/135 short put spread trades at roughly $4.54 credit and has a breakeven near lows.
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Michael Rechenthin, Ph.D., (aka “Dr. Data”), managing director of research and development, has 25 years of trading and markets experience. He is best known for his weekly Cherry Picks newsletter. On Thursdays, he appears on Trades from the Research Team LIVE.
Nick Battista, tastylive director of market intelligence, has a decade of trading experience. He appears Monday-Friday on Options Trading Concepts Live. On Wednesdays, he co-hosts Johnny Trades. @tradernickybat
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