December 16 [BOC Guest] Hang Seng Index, Xiaomi, Alibaba, Tencent, China Resources Beer
Simon: Niki, hello! Today (the 16th), I am very pleased to invite you over to discuss the Hong Kong stock market and individual stock situations. Without further ado, let's get started.Looking at today's market, it has indeed dropped significantly in terms of its movement. So, I would like to ask, under the current market environment, with a drop like today’s, for example, by looking at the distribution chart of Hang Seng Index bull and bear warrants, are there any references or insights you can share with us?
Niki, Director of BOC International: The market situation today has indeed fallen quite sharply. If we calculate from yesterday’s (the 15th) closing price of 25,628 points, today it reached a low of 25,086 points, resulting in an approximate decline of nearly 600 points. Yes. Therefore, many investors are asking why there was such a sudden drop. I have been involved in trading CBBCs (Callable Bull/Bear Contracts) and structured warrants for a long time. However, I always advise investors—whether or not they participate in the CBBC and warrant markets—to cultivate a habit, such as reviewing the distribution chart of Hang Seng Index bull and bear warrants daily. Let me repeat that: the distribution chart of Hang Seng Index bull and bear warrants is crucial. Why? In fact, when you look at the Hang Seng Index bull contracts, it shows where the market funds have been flowing recently to buy which recovery zones’ bull contracts. I noticed that over the past month, the heavy accumulation zone for Hang Seng Index bull contracts has consistently been between 25,100 points and 25,200 points, maintaining around 1,400 futures contracts. At its peak, I even saw close to 1,800 futures contracts. This means everyone believes this level won’t be breached, leading them to purchase the Hang Seng Index bull contracts within this recovery zone, right?
We often talk about how to choose the recovery data for Hang Seng Index bull contracts. Basically, people choose positions they think are unlikely to be triggered before making a purchase. Because if the recovery zone for the bull/bear contracts is too close, it’s easy for them to be called back, making the risk of purchasing these contracts quite high. Therefore, over the past month, I observed that market capital continued to accumulate at the 25,100-point level, meaning that everyone believed this position wouldn't be breached. But often, when most people believe a certain level serves as strong support, unexpected situations arise. Many times, everyone is watching this level, thinking it held up for one week, then two weeks, then three or four weeks, only for the market to adjust suddenly one day and fall exactly to this point. Today's situation perfectly illustrates this phenomenon. From the start of the market today, it began to fall. I discussed with traders where the market might fall today, and I immediately told him that once it approaches the range of 25,000 - 25,100 points, this batch of Hang Seng Index bull contracts will likely be washed out, and the market should stabilize after that. As you’ve seen, the declines were significant. During this period, I strongly recommend cultivating the habit of observing this distribution chart. At the very least, it provides insight into market sentiment and reveals where key positions are being deployed.
So, you’ll notice that after the market fell slightly below 25,100 points in the afternoon, it started rebounding. Currently, the declines have narrowed, and it has returned above 25,200 points. Thus, by regularly checking the distribution chart, you won’t find the market's downturn inexplicable, nor will you dwell on whether there was special news causing the drop. Sometimes the market just falls because it does. Certain levels represent heavy accumulation zones, and through observations of off-market index futures activities among major players, we can spot this. Hence, by reviewing the street-level distribution charts of leveraged products, you can roughly predict where the market might halt during declines or face resistance during rises. This helps develop your judgment of the market. Personally, I use this method to form my own views on the market. Therefore, I highly suggest everyone take a look—it’s incredibly useful information. You can log into our platform.
As you can see, this afternoon when the market fell below 25,100 points, it paused briefly before starting to rebound. The decline has now narrowed, returning to above 25,200 points. By developing the habit of reviewing the distribution chart, investors won’t feel as though the market is falling without reason, nor will they obsess over whether there was any specific news causing the decline today. Sometimes, markets fall simply because they need to fall. Certain price levels represent heavy accumulation zones, and by observing how major players in the futures market outside the exchange interact, one can understand this dynamic. Therefore, by analyzing the street-level open interest distribution of leveraged products, investors can roughly anticipate where the market might stabilize during a downturn or encounter resistance during an upturn. This helps cultivate better market judgment. Personally, I rely on these charts to form my own market views, so I highly recommend everyone to take a look. These data points are extremely useful. You can log into our...Website (www.bocifp.com), which we update twice daily.
Simon: Additionally, by logging into the Bank of China International website and clicking on the callable bull/bear contracts section, there is a feature for the distribution chart of callable bull/bear certificates. This allows users to clearly view the data Niki just mentioned, which is updated daily. I recommend everyone take a closer look. Many short-term investors calculate support levels, resistance levels, or perform data analysis based on their market judgment. The distribution chart of callable bull/bear certificates provides another reference point.
Simon:The second question some investors might ask is, after today's (the 16th) decline, what are your thoughts if one considers deploying Hang Seng Index (HSI) warrants, such as call warrants or put warrants?
Niki, Director of Bank of China International: That’s an excellent question. As we approach the end of the year, I have observed that investors’ willingness to enter individual stocks has weakened. From the beginning of the year until now, many have achieved satisfactory profits. In the last couple of weeks, they may be more focused on fluctuations in the index. Looking at the index, it dropped over 500 points today. However, in the previous week or two, the market's volatility was relatively narrow, only around 200 to 300 points. Thus, when choosing related products, investors were opting for more aggressive terms, such as those with stop-loss levels within 200 to 300 points. But after today, people realized that volatility might start to widen. For instance, with the HSI currently at 25,200 points, investors previously selected products with a stop-loss at 25,000 points, believing a 200-point gap would not be breached. After today, however, they have become more cautious, realizing the market downturn could intensify. Therefore, I suggest adjusting the selection criteria based on current market conditions. Previously, when the market fluctuation was narrow, one could choose products closer to the price, with a distance of 200 to 300 points. Now, for HSI bullish contracts, it is advisable to select stop-loss levels at least at 24,800 points, or even 24,500 points, meaning a range exceeding 500 points. These terms still provide decent leverage. For example, our product code 53747 $BI#HSI RC2807V.C (53747.HK)$ , this HSI bullish contract has a stop-loss level at 24,818 points, with a distance of approximately 400 points, offering leverage of about 50 times. For bearish contracts, consider product code 58848 $BI#HSI RP2803S.P (58848.HK)$ , which has a stop-loss level at 25,655 points, also around 400 points away, with leverage of about 45 times. These are suitable for investors who prefer high leverage, focus on immediate volatility, and trade on fluctuations.
As for HSI call and put warrants, do they carry relatively lower risks, lower leverage, and potentially lower returns? Indeed, during this period, implied volatility of the HSI has not fallen significantly because market volatility has resurfaced. For instance, some HSI call warrants expiring around May next year, with strike prices near 28,000 points, show implied volatility of roughly 21%, which is typical in the market. Call and put warrants without stop-loss risk are better suited for less aggressive investors. Therefore, based on your risk tolerance and market judgment, you can choose between callable bull/bear contracts or call/put warrants. For example, regarding HSI call warrants, we have product code 23128 $BI-HSI @EC2605B.C (23128.HK)$ , a call warrant with a strike price of 28,341 points, expiring at the end of May next year, offering leverage of approximately 13 times. As for HSI put warrants (which are tools for betting on declines), the market offers a relatively close-to-price option with product code 20721 $BI-HSI @EP2603B.P (20721.HK)$ . This put warrant has a strike price of 23,880 points, expiring at the end of March next year, providing leverage of about 13 times. Therefore, investors seeking significant short-term fluctuations might consider callable bull/bear contracts, but I advise against selecting overly close-to-price options. On the other hand, HSI call and put warrants without stop-loss risks are more suitable for less aggressive investors.
Simon: Yes, so everyone can choose the corresponding bull/bear certificates or call/put warrants based on their risk tolerance and market judgment. Another question is, given that today (the 16th) has seen such a significant drop, is it possible to call and consult about product changes during trading hours?
Niki, Director of BOC International: Of course, we welcome that very much. In fact, after today’s market decline, we received many inquiries from investors. For instance, some previously short-term, out-of-the-money put warrants are now quotable again today, and people have been inquiring about relevant pricing. Therefore, BOC International will provide high-quality services to everyone. In addition to visiting our website for real-time market analysis and data, you are also welcome to call our Warrant Hotline at 00+852 3988 6909 during trading hours. You can speak with our colleagues to inquire about product-related information, terms, or share your market views with us. Based on your perspectives, we will help select tools suitable for the current market conditions. With over 7,000 instruments in the warrant market and more than 6,000 products in bull/bear certificates, choosing the right one isn't easy. We assist in selecting products and terms aligned with your risk profile, making our service highly personalized.
Simon: Everyone should make good use of this hotline to consult promptly when the market changes because product terms can fluctuate significantly during times of high volatility. If you want to quickly understand the latest product situation, feel free to call BOC International's hotline at 39886909 for further consultation.
Simon:Next, let’s talk about individual stocks. First, I’d like to mention Xiaomi (01810). Over the past couple of days, Xiaomi’s stock price has dropped slightly but has generally been hovering around 40 yuan for quite some time. I would like to ask what observations have been made regarding investor behavior or data trends in the warrant market during this period?
Niki, Director of BOC International: Xiaomi's stock price has remained stable near 40 yuan during this period. Given its previous low of 36.6 yuan, this is likely the recent bottom. The stock once rose to near 42 yuan but has retreated along with the broader market these two days, returning to around 40 yuan, currently in a consolidation phase. Over the past few days, capital inflows into Xiaomi's bullish warrants have been observed. According to the top five warrant capital flow data on our website (www.bocifp.com), there was approximately 3.6 million yuan of inflow into Xiaomi’s bullish warrants in the last trading session. Hence, every time Xiaomi retraces, it attracts inflows into bullish positions, and today (the 16th) is no exception. If you are optimistic about Xiaomi, in addition to considering the underlying stock, you could utilize call warrants as a tool to benefit from potential rebounds with minimal capital. For example, our 15276 Xiaomi Call Warrant has a strike price of 57.88 yuan, expiring at the end of April next year, offering leverage of about 8 times. For put warrants, you may consider 22168, which has a strike price of 32.18 yuan, expiring at the end of June next year, with leverage of about 5 times. From a technical analysis perspective, Xiaomi shows buy signals in the short term, indicating a slightly positive outlook for reference. $BIXIAMI@EC2604D.C (15276.HK)$ Xiaomi Call Warrant 15276 has a strike price of 57.88 yuan, expiring by the end of April next year, with leverage of approximately 8 times. As for Xiaomi Put Warrants, you may pay attention to 22168. $BIXIAMI@EP2606C.P (22168.HK)$ The latter has a strike price of 32.18 yuan, expiring by the end of June next year, providing leverage of about 5 times. From a technical analysis standpoint, Xiaomi's short-term signals are mainly indicative of buying, showing a slightly optimistic bias, offered here as a reference for investors.
Simon:Speaking of Xiaomi, let's also discuss another stock: Alibaba (09988). Earlier, while reviewing the steady capital flow data on BOC International’s website (www.bocifp.com), I noticed that whether looking at a single day or the past five trading days, Alibaba ranks among the top in terms of bullish warrant capital inflows. However, today (the 16th), the stock price also fell along with the broader market. I would like to ask, from the perspective of capital flows, does the continued inflow of bullish funds suggest that investors in the warrant market remain optimistic about Alibaba?
Niki, Director of BOC International: After Alibaba announced its earnings at the end of November, its stock price remained relatively stable but showed a downward trend. Today (the 16th), it hit a low of 141.6 yuan, nearly the lowest point in over two months. Investors who follow earnings should know that, apart from optimism about Alibaba's business environment, there is also anticipation for breakthroughs in Alibaba’s AI or chip development initiatives. Therefore, during this period of stock price pullback, capital has mainly flowed into its bullish positions. In the last trading session, Alibaba ranked first in bullish warrant inflows, reaching over 8 million yuan. Extending the view to the past five trading days, inflows into Alibaba’s bullish positions totaled 22 million yuan, still ranking at the top. Thus, investors appear relatively optimistic about Alibaba in this round. Regarding Alibaba's related warrant products, you may consider Call Warrant 23258, which has a strike price of 160.1 yuan, expiring around mid-April next year, offering leverage of about 6 times. For Put Warrants, consider 20664. $BIALIBA@EC2604E.C (23258.HK)$ This Put Warrant has a strike price of 160.1 yuan, expiring around mid-April next year, providing leverage of approximately 6 times; for Put Warrants, you may focus on 20664. $BIALIBA@EP2604B.P (20664.HK)$ , with a strike price of 134.9 yuan, expiring at the end of April next year, offering leverage of approximately 5 times.
Simon: Everyone can log in to the BOC International website and enter 9988 or Alibaba in the warrant search bar to find 31 related warrants, providing a wide range of choices. You can use the search tool to find a product that suits your needs.
Simon:Shifting to fund flows, the next stock I want to inquire about is Tencent (700). From the perspective of capital inflows, Tencent ranked among the top five in the last trading session, and there has also been bullish capital inflow over the past five trading days. Although Tencent's share price fell below the lower Bollinger Band today (the 16th), from the perspective of the warrant market, are investors still optimistic about Tencent’s stock price trend?
Niki, Director of BOC International: Exactly. Over the past five trading days, the inflow of funds into Tencent's bullish call warrants reached nearly 11 million yuan, similar to Alibaba’s 22 million yuan, making Tencent one of the stocks with the highest capital inflows. Today, Tencent’s share price dropped to a recent low since early October, reaching as low as around 592 yuan, breaking below the 600-yuan level. Therefore, we can see continued capital inflows into bullish positions today. I suggest that if you take advantage of this price adjustment to enter the market, you can adopt a one-third position strategy—using one-third of your funds each time you enter. If the market falls further, you will still have funds available to buy at lower levels without being fully invested right away. With such an approach, when certain support levels are breached, you can make small additional purchases, resulting in a relatively appropriate and lower average entry price. For Tencent-related warrant products, you may consider the call warrant 15532, $BITENCT@EC2608A.C (15532.HK)$ with a strike price of 610 yuan, which is relatively close to the current price, as the share price is now around 590 yuan, offering leverage of about 6 times, expiring at the end of August 2026. There was significant capital inflow today. For put warrants, you can refer to 21191, $BITENCT@EP2603C.P (21191.HK)$ with a strike price of 570.27 yuan, expiring in mid-March next year, offering slightly higher leverage of about 11 times. This pair of products can help you navigate the current market situation and make corresponding arrangements.
Simon:Before today’s close (the 16th), I would like to discuss a stock that differs from previous sectors: China Resources Beer (0291). Despite the broader market decline today, China Resources Beer has shown gains. I would like to ask, if you wish to deploy using warrants, what are your thoughts?
Niki, Director of BOC International: In fact, our starting point for choosing warrant instruments is always to analyze the underlying stock and the broader market. Recently, whether it is the direction of the Federal Reserve meetings or the Central Economic Work Conference, it is evident that expanding domestic demand will continue to be one of the nation’s key policies. Therefore, regarding consumer stocks, I recommend paying attention not only to special consumption sectors like IP-related businesses but also to ordinary domestic demand stocks. For example, China Resources Beer (291) did not have any major news today, yet its share price performed stronger than the broader market. While the broader market fell by more than 2% today, China Resources Beer rose by over 1%. Hence, apart from buying related domestic demand consumer stocks, you might consider allocating some funds to high-leverage call warrants to amplify profit returns. People often assume that we only discuss large tech stocks, chip stocks, or commodity stocks, but in fact, BOC International offers a wide variety of warrant tools. For instance, in the retail sector, we have warrant products for Li Ning, Anta, Mengniu, and China Resources Beer.
Here’s an update: at the beginning of this year, we covered about 40-50 stocks. By the end of this year (2025), our coverage has expanded to over 110 stocks, covering many sectors and types. If you are interested in any particular stocks, besides purchasing the underlying shares, you might also want to explore their warrants. BOC International provides corresponding reference platforms. Returning to China Resources Beer, we also offer relevant warrant tools for your consideration, such as 23124, $BI-CRBH@EC2607A.C (23124.HK)$ a call warrant for China Resources Beer, with a strike price near 39 yuan, expiring at the end of July next year, offering leverage of approximately 5 times. Therefore, based on your analysis and views on certain stocks, you can choose suitable investment tools.
Simon: Many individual stocks are already covered, corresponding to 110 related equity-linked warrant products. Therefore, when purchasing individual stocks, if you would like to explore related equity-linked warrant products, feel free to call BOCI for consultation during market hours for quicker information. Additionally, fund management is a very interesting topic—whether it's determining what percentage of funds to allocate when buying common shares versus warrants, or how to distribute bets when participating in warrant trading. If there is an opportunity, we can share more reference advice with investors on this matter. Hopefully, next time or in the future, we will have the chance to further analyze this knowledge in detail.
Niki, Director of BOCI: If you have other types of questions you'd like to learn about, feel free to leave us a message, and we will address them in our next issue. We also hope to take advantage of the potentially quieter market conditions during the Christmas holidays over the next two issues to respond to some of the questions you are eager to know about.
Simon: Alright, that’s about all the time we have for today (the 16th). See you again next week. Bye-bye.
This article does not constitute any investment advice.
This article is for reference only and does not constitute any investment advice. The market data, opinions, and analysis contained herein may change at any time without prior notice. We shall not be liable for any loss or damage arising from reliance on the information in this article. Technical analysis merely indicates whether certain technical conditions are met; a comprehensive evaluation of asset performance should incorporate additional data. Trading decisions should not be based solely on the content of this article. Please note that past performance is not indicative of future results.
Risk Disclaimer: The above content only represents the author's view. It does not represent any position or investment advice of Futu. Futu makes no representation or warranty.Read more
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