FTSE Xinhua China index

S

svrart

Hello,

Has anyone looked as this future. It started trading today and reflects the big stocks in mainland China. Prospects for China are very bright, but the market has been in a bear for about 5 years and has lately been dropping quite sharply.

Bottom fishing, anyone (with all the dangers of this sport, of course)? I believe this index will be several times this level over the years

I have looked at this for a few hours - spread about 5 points, volume quite thin. For some reason IB is not showing low, high or volume. Dont know why.

Also, US residents cannot trade this.
 
Quote from svrart:

Hello,

Has anyone looked as this future. It started trading today and reflects the big stocks in mainland China. Prospects for China are very bright, but the market has been in a bear for about 5 years and has lately been dropping quite sharply.

Bottom fishing, anyone (with all the dangers of this sport, of course)? I believe this index will be several times this level over the years

I have looked at this for a few hours - spread about 5 points, volume quite thin. For some reason IB is not showing low, high or volume. Dont know why.

Also, US residents cannot trade this.
More...

Today was the first day the futures and options traded. The spreads and liquidity in both futures and options will improve over time. Liquidity was not great on the first day of trading but it was there. I saw a few 20 lots go through on the future side while the largest option trade was for 50 contracts.

Keep in mind, expiration is one week away and thus unless you're scalping, some institutions may stand on the side lines till then.

One more note: you mentioned that the china market has been a bear for the past 5 years. I encourage you to do a bit more research into this area. The bear market has been for the shares trading in China. (sorry but no time to go into the reasons or details here) This index is dominated by China Mobile, Petro China and a number of other stocks which all freely trade and are listed in Hong Kong. (for instance, petro china is up more the 3 fold since 2000) The index has actually outperformed HSI the past two years.

For more details take a look here:
http://www.hkex.com.hk/prod/hsifo/fxi_brochure.pdf
and
http://www.hkex.com.hk/prod/hsifo/fxind.htm


For the record and in the spirit of full disclosure: IB's affiliate, Timber Hill is making markets in the FXC options.

Also note: the contract does not have CFTC approval and thus the reason US residents can not trade it. I have spoken to the exchange who have said that they are seeking such approval.
 
Hi def,

Thanks for the info and clarification.

Further questions:
Where can I get longer term charts for this index (10 years or so).

Are there any futures / options that corelate with the Shanghai index. I think that has more potential because it is currenlty selling off and can be bought cheap. The ones trading on HK seem to be relatively expensive.
 
Quote from svrart:

Hi def,

Thanks for the info and clarification.

Further questions:
Where can I get longer term charts for this index (10 years or so).

Are there any futures / options that corelate with the Shanghai index. I think that has more potential because it is currenlty selling off and can be bought cheap. The ones trading on HK seem to be relatively expensive.
More...

Don't know but many of the stocks haven't traded for 10 years. Just because something is selling off doesn't make it cheap. Look at the levels they are selling off from. A good example is Japan in the 80's.

As for correlations with the Shanghai index - they have a life of their own. HHI and FXC in Hong Kong are probably the best proxies for China at the moment.
 
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