how would a US citizen short China?
- Thread starter cognitivefun
- Start date
you can't trade the foreign index futures either, not just the options.
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HSI futures have CFTC approval. The options don't have approval as they are classifed as equity index options. Perhaps such rules made sense 5-10 years ago but in this electronic age ....
As for using HSI to short China, perhaps the Hang Seng will sink if a drop in China knocks the HK economy but I don't think it's your best bet. The largest constituent in the HSI is HSBC - a global bank (33%), China mobile follows next (11%) which is a china play but tradeable in the states.
I'm just assuming the original poster intended to short on the outbreak of SARS. Flu season is coming to an end, it ends basically in April-May. Thus, no time left for SARS to spread much further. Even if we get a few more cases it will peter out pretty quick. Mo' betta' scalp some China longs ...
As for SARS coming back in force, I'm crossing my fingers for next year. :eek:
As for SARS coming back in force, I'm crossing my fingers for next year. :eek:
In the short run EWT is a lousy proxy for China. With all the tech exports, it is more correlated w/ NQ than pure China plays.
It was my supposition that he might have gotten the idea to short China from an interview in the weekend Barron's with Raj Gupta, who runs $1B out of NY. From his interview:
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Q: So what are the implications of a China fadeout?
A: If China fades, then the industrial cycle globally -- the inventory cycle -- accelerates on the downside. It will have a very negative impact on Asian stock markets because there is a big China premium built into all the Asian stock markets. It will have a very negative impact on Hong Kong. The extremely inflated prices for commodities will go down very substantially. It will be quite helpful in removing some of the fears of inflation that are dominant right now in the fixed-income markets of the G-3 countries.
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Elsewhere in the article, he makes a case for a bubble in the Chinese markets based on inflation and soaring commodity prices. I had not considered SARS. The Taiwan suggestion was a low priced ETF that would be somewhat correlated, although you are correct that it may be far from the best way to short them.
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Q: So what are the implications of a China fadeout?
A: If China fades, then the industrial cycle globally -- the inventory cycle -- accelerates on the downside. It will have a very negative impact on Asian stock markets because there is a big China premium built into all the Asian stock markets. It will have a very negative impact on Hong Kong. The extremely inflated prices for commodities will go down very substantially. It will be quite helpful in removing some of the fears of inflation that are dominant right now in the fixed-income markets of the G-3 countries.
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Elsewhere in the article, he makes a case for a bubble in the Chinese markets based on inflation and soaring commodity prices. I had not considered SARS. The Taiwan suggestion was a low priced ETF that would be somewhat correlated, although you are correct that it may be far from the best way to short them.
Yes, ktm, I got the idea from the Barron's interview, although I had thought about it for awhile. That interview made it gel for me.
I am still at a loss. It doesn't matter really, as there are great opportunities in every market, but I still would like to "short China" in some reasonable way without having to start an offshore entity or anything like that.
I am still at a loss. It doesn't matter really, as there are great opportunities in every market, but I still would like to "short China" in some reasonable way without having to start an offshore entity or anything like that.