Hong Kong Derivatives Notes Today | Hang Seng Index rebounds, but tech stocks remain somewhat volatile

Hang Seng Index today $Hang Seng Index (800000.HK)$ Up slightly by 0.16%, extending gains for a second straight day and reclaiming the 30-day moving average; meanwhile, the Hang Seng Tech Index fell 0.96%, marking two consecutive declines—the two indices are clearly moving to different rhythms. The Hang Seng appears relatively stable, but tech stocks remain volatile and have not yet shown a broad-based recovery.

For those trading derivative warrants, we’ll first watch whether the Hang Seng Index can hold the 24,000 level today. The major bear warrant concentration zone lies between 24,600 and 24,699 points on the upside, while the bull warrant concentration zone is between 23,600 and 23,699 points on the downside—the index is currently sandwiched right in between.

Therefore, there’s no need to rush into directional bets at this stage:

– If bullish on the Hang Seng Index, wait for it to stabilize above 24,000 before considering bull warrants;

– If bearish on the Hang Seng Index, first monitor whether it faces resistance above 24,500.

– If only range-bound movement is expected, longer-dated warrants may offer better risk control.

Several stocks worth watching today

Tencent $TENCENT (00700.HK)$ Down 0.56%, marking a third consecutive decline, yet still holding above the 60-day moving average. Open interest in calls and bull certificates has increased, indicating many investors previously favored bullish positions.

For Tencent, the major concentration zone for bull certificates lies between HK$400 and HK$404.80, still some distance from the current price. In the short term, what matters more is whether the stock can reclaim its short-term moving averages, rather than adding bull certificates at the first sign of a pullback.

Meituan $MEITUAN-W (03690.HK)$ Down 0.95%, breaking below the 5-day moving average, but still showing notable gains over the past 10 days. Open interest in puts and bear certificates has risen, reflecting that some investors are beginning to adopt defensive strategies.

The major concentration zone for bull certificates is between HK$69 and HK$69.95, while that for bear certificates is between HK$87 and HK$87.95. With the underlying stock currently positioned midway between these two zones, volatility is likely to increase going forward.

CATL$CATL (03750.HK)$ Up 2.73%, but this remains a rebound following a prior decline. Open interest in calls has increased, and bear certificate open interest has also surged significantly, clearly indicating market divergence.

If deploying bull certificates, it’s best to maintain distance from the major concentration zone between HK$555 and HK$559.50—don’t simply choose overly aggressive strikes just because the underlying stock rebounded for one day.

Ganfeng Lithium $GANFENGLITHIUM (01772.HK)$ Extra caution is required. The stock has declined for six consecutive days and hit a year-to-date low, yet open interest in bull certificates surged by 309.51% in a single day—clearly signaling that some traders are betting on a rebound amid the downturn.

The issue is that the concentrated open interest zone for bull certificates lies between HK$38 and HK$38.98, which is already very close to the current price. For such stocks, even if one wants to bet on a rebound, it’s not suitable to use bull certificates with strike prices too close to the spot price.

One-sentence summary for today

Today's market isn't entirely directionless; rather,The Hang Seng Index remained relatively stable, tech stocks diverged, and some weak stocks still saw traders adding bull certificates against the trend.。

When selecting products, we still first consider the underlying stock's price level, then the knock-out price, and only lastly the leverage. Street-wide open interest merely reflects positions held at some point in the past and shouldn't be directly used as an intraday trading signal.

To compare more detailed terms of call warrants, put warrants, bull certificates, and bear certificates across individual stocks, you can download the 'Warrants & CBBC Product Overview' and gradually filter options based on your market outlook and risk tolerance.

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