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Options Wednesday: A Comparison of Implied Volatility in the Chinese Stock Market

Dec 05, 2018

 

The Data Daily: Where the charts tell the story

This week's Options Wednesday focuses on a comparison of implied volatility of the Chinese stock market.

 

From the graphs below we observe:

  • Implied volatility levels for iShares China Large-Cap ETF (FXI) and major Chinese stocks like Alibaba (BABA) have begun to normalize since the G20 Summit meeting between US President Donald Trump and Chinese President Xi Jinping.  The US and Chinese governments are exploring ways to avoid an escalation in their ongoing trade dispute which has brought down embedded risk premiums in the options markets for liquid Chinese stocks.

 

Chinese Stock Market - iShares China Large-Cap ETF (FXI)

Sinopec - China Petroleum & Chemical Corporation (SNP  US, 386 HK) - Rated "Attractive" in our China All-Cap Global Top Stock Ideas

 

JD.com (JD US) - Rated "Top Short" in our China All-Cap Global Top Stock Ideas

Alibaba (BABA) - Not rated in our Global Top Stock Ideas

China Life Insurance Company Limited (LFC US, 2628 HK) - Rated "Unattractive" in our China All-Cap Global Top Stock Ideas