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港股窩輪Jenny

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Observing Key Stocks in the Derivatives Market | Strong Performers Aren’t Just About Calls—Street Position Changes Require Distinguishing Between 'Chasing In' and 'Exiting'

Hong Kong stocks continued their rebound today, but individual stocks moved at very different paces.

Some stocks broke out to the upside, yet bull warrant open interest declined significantly; others saw substantial gains with both bull and bear warrant open interest surging simultaneously; meanwhile, some large-cap tech stocks remain in consolidation, but bullish positions have not unwound too quickly.

This time, we’ve selected five stocks worth watching based on their price trends, changes in warrant open interest, and key levels of bull/bear warrants. A quick reminder: open interest data comes from the previous trading day and should only be viewed as lagging position signals—it shouldn’t be directly interpreted as intraday capital flow direction.

Market observations show Alibaba has gained for five consecutive sessions; BYD broke above its 5-day moving average (MA5); China Life Insurance reclaimed MA5; China Hongqiao broke through its 20-day moving average (MA20); and Tencent fell for a fourth straight session, slightly dipping below its 60-day moving average (MA60). In terms of warrant open interest, the shifts between bullish and bearish positions varied across these stocks.

Alibaba $BABA-W (09988.HK)$ : Offers relatively attractive short-term risk-reward potential, though it’s no longer completely free of resistance levels.

Alibaba closed today at HK$110.8, up 0.09%. Although the single-day move was modest, it has accumulated gains of 15.66% over five days and 19.14% over ten days, making its short-term momentum notably strong among large-cap tech stocks.

Today's high and low were HK$112.6 and HK$107Therefore, in the short term, the first line of support can be set at HK$107, while resistance to watch on the upside is whether HK$112.60 can be broken through.

Open interest data:

– Call open interest increased by 0.50%

– Put open interest decreased by 0.86%

– Bull warrant open interest increased by 6.68%

– Bear warrant open interest increased by 6.46%

This set of data is quite interesting. Long positions haven't retreated, and bull warrant open interest has clearly risen; however, bear warrant open interest has also increased simultaneously, indicating that as prices have climbed to current levels, the market is starting to see more two-sided positioning rather than unanimous bullish sentiment.

Alibaba's major bull warrant concentration zone is between HK$85 and HK$89.95, while the major bear warrant concentration zone is at HK$125 to HK$129.9. Based on a price of HK$110.8, the current price is not close to either heavy call or put inventory zones, so the more critical factor now is whether the warrant terms can effectively track the underlying stock.

Product Strategy

For those bullish on Alibaba continuing its rebound, consider comparing slightly in-the-money call warrants with higher delta, or bull certificates with knock-out levels around or below HK$100 and sufficient buffer.

If choosing bull certificates, don’t assume that the closer to the knock-out level the better simply because the heavy inventory zone is as low as HK$85 to HK$89.95. Alibaba has already accumulated notable gains in the short term, and if it falls below HK$107, the volatility of higher-leverage bull certificates will amplify first.

For bearish traders, it’s more suitable to wait for clear resistance near HK$112.6 or for the underlying stock to break below HK$107 again before comparing put warrants and bear certificates; an increase in street inventory of bear certificates alone isn’t sufficient to confirm the rally has ended.

BYD $BYD COMPANY (01211.HK)$ : The underlying stock broke above its 5-day moving average (MA5), yet long-side street inventory declined.

BYD closed at HK$86.15, up 2.62%, rising from HK$82.2 to a high of HK$86.8 today, and reclaiming its 5-day moving average (MA5).

The five-day gain is only 3.24%, but the 10-day return has already risen 18.18%, indicating that the current rebound is not slow; however, the 20-day and 60-day performances remain at -0.46% and -19.40%, suggesting this is more of a short-term recovery within a medium-term downtrend rather than a full trend reversal.

Open interest (street inventory) breakdown:

– Call open interest unchanged

– Put open interest rose for consecutive days, up 1.39% in a single day

– Bull warrant open interest declined for consecutive days, down 11.17% in a single day

– Bear warrant open interest declined for consecutive days, down 5.61% in a single day

Although the stock price rose, the decline in bull warrant open interest does not necessarily indicate bearish sentiment; it may also reflect long positions taking profits during the rebound. The drop in bear warrant open interest likewise suggests short positions are not being actively added.

The heavy concentration zone for BYD bull certificates is at HK$68 to HK$68.95, and the heavy concentration zone for bear certificates is at HK$94 to HK$94.95. The current price is significantly closer to the bear certificate heavy zone; if the stock price continues rising toward the HK$94 level, the risk of bear certificate recalls will gradually increase.

Product Strategy

For those bullish on BYD breaking above HK$86.8, consider slightly in-the-money calls or bull certificates with knock-in levels below HK$80, avoiding knock-in levels too close to the intraday low of HK$82.2.

If you only expect the stock to rebound to around HK$90, selecting deep out-of-the-money calls may not be suitable—because even if the directional view is correct, insufficient delta and time decay could still drag down product performance.

For bearish positioning, it’s unwise to enter early solely because the bear certificate heavy zone lies at HK$94–HK$94.95. A more practical approach is to first observe whether HK$86.8 can be breached; only if the breakout fails and the price falls below HK$82.2 would short positions become clearer.

China Life Insurance $CHINA LIFE (02628.HK)$ : Its upward momentum is accompanied by growing open interest, with both bulls and bears increasing their positions.

China Life Insurance rose today 4%, closing at HK$28.62, moving back above its 5-day moving average (MA5). The intraday high and low were HK$28.80 and HK$26.50, respectively.

It gained only 1.13% over five days, rose 6.28% over ten days, and is still up 7.15% over 60 days. Compared to many stocks still in a medium-term correction, China Life Insurance shows a more intact technical structure.

Open interest activity has also been quite active:

– Call open interest rose for consecutive sessions, increasing by 6.71% in a single day

– Put open interest declined for consecutive sessions, dropping by 1.01% in a single day

– Bull warrant open interest rose for consecutive sessions, increasing by 11.95% in a single day

– Bear warrant open interest rose for consecutive sessions, increasing by 23.31% in a single day

The increase in long positions is easy to understand, but the rise in street inventory of bear warrants is even larger, reflecting that inverse short positions are also accumulating after the sharp rally in the stock price. This doesn't necessarily mean the price will definitely peak at HK$28.80, but it suggests that as the upward move approaches resistance levels, market divergence could widen.

The main concentration zone for bull warrants is at HK$23.00 to HK$23.98, while the main concentration zone for bear warrants is at HK$38.00 to HK$38.98, both relatively far from the current price.

Product Strategy

For those bullish on China Life Insurance, watch closely whether HK$28.80 can hold and break out. If the breakout succeeds, slightly in-the-money calls will reflect the upward momentum more effectively than deep out-of-the-money products.

If using bull warrants, there's no need to chase extremely tight knock-in prices. Given today’s volatility has already ranged from HK$26.50 to HK$28.80, a knock-in price too close to around HK$26.00 could lead to significantly higher product volatility even during normal pullbacks.

For bearish traders, wait for confirmation of resistance at HK$28.80 and a drop below the previous session’s closing level near HK$27.50. The main bear warrant concentration zone remains well above HK$38.00, so the rise in street inventory of bear warrants shouldn’t be directly interpreted as an imminent knock-in event.

China Hongqiao $CHINAHONGQIAO (01378.HK)$ : After a 7% rise, the street warrant holdings percentage looks very active, but the base figure matters more

China Hongqiao closed at 23 yuan, up 7.08%, hitting an intraday high of HK$23.28 and breaking above the 20-day moving average (MA20).

It gained 9.94% and 11.43% over the past 5 and 10 days, respectively,but declined 14.69% over 20 days and 37.14% over 60 days. Thus, this move represents a strong rebound, but viewed over a longer timeframe, the earlier downtrend has not yet been fully reversed.

Changes in derivative street warrant holdings are extremely dramatic:

– Call warrant street holdings increased by 2.23%

– Bull warrant street holdings surged by 156.34%

– Bear warrant street holdings soared by 968.75%

Seeing a figure as high as 968.75%, one’s immediate reaction might be that short positions have surged significantly. However, such a sudden spike in percentage is often due to a previously low base of outstanding warrants, and one shouldn’t assume the market has turned uniformly bearish based solely on the magnitude of the increase.

The densest concentration of bull warrants is at HK$19 to HK$19.99, while the densest concentration of bear warrants is much farther away at HK$43 to HK$43.98. With the current price at HK$23, it is relatively close to the bull warrant concentration zone. If the stock price falls back below around HK$21, the risk associated with bull warrants deserves more attention than that of bear warrants.

Product Strategy

China Hongqiao exhibits relatively large intraday volatility. For those chasing upside momentum, warrant terms should be more conservative compared to typical large-cap stocks. Bull warrants with strike prices closer to the current price or knock-out levels clearly below HK$20 are better suited to withstand normal market fluctuations than high-leverage products with knock-out levels near the current price.

If the stock fails to break above HK$23.28 and retreats back toward the opening price of around HK$21.5, put warrants could be considered to express a short-term expectation of profit-taking. The bear warrant concentration zone is too distant to offer meaningful guidance for intraday tactical decisions at this stage.

A common misconception with stocks like this is assuming directional clarity simply because the underlying stock has risen sharply and the street inventory percentage of bull/bear warrants appears even larger. In reality, this often indicates heightened market positioning activity and amplified product volatility.

Tencent $TENCENT (00700.HK)$ : The underlying stock remains weak, but call warrant street inventory continues to rise, reflecting that some traders are positioning ahead of a potential rebound.

Tencent closed at HK$456.2, down 0.31%, marking its fourth consecutive decline and slightly breaching the 60-day moving average (MA60).

It dipped as low as HK$447.4 during the session before recovering some ground; down 1.08% over five days, yet still up 8.57% over ten days. This pattern resembles a short-term pullback rather than a complete loss of rebound momentum.

Open interest data:

– Call open interest rose for another day, increasing by 1.15%

– Put open interest declined for another day, dropping by 1.47%

– Bull warrant open interest decreased by 11.33%

– Bear warrant open interest fell again, down 15.86% on the day

Call open interest continues to rise, while bull warrant positions have clearly declined, suggesting bullish investors may prefer instruments without a knockout feature, or that some bull warrant holdings are being reduced. The simultaneous drop in bear warrant open interest indicates short sellers are not actively adding bearish positions amid the decline.

The major concentration zone for Tencent bull warrants is at HK$400 to HK$404.8, while the major concentration zone for bear warrants is at HK$490 to HK$494.8. At a current price of HK$456.2, the distances to both zones are roughly symmetrical, though the bear warrant zone is slightly closer.

Product Strategy

For those bullish on a Tencent rebound, monitor first whether the HK$447.4 level holds and whether the share price can reclaim the intraday high of HK$459.2. Until it firmly regains this level, slightly out-of-the-money calls may be more suitable than highly leveraged bull warrants.

When selecting bull warrants, although the distance to the HK$400–HK$404.8 concentration zone isn’t particularly close, the warrant’s actual call price should still align with your intended holding period; the distance criteria for intraday trading versus multi-day positions should not be the same.

On the bearish side, watch whether the HK$447.4 support level breaks. Only if the price falls below this level and shows weak rebound momentum would put warrants become relatively more appealing; currently, street inventory of bear warrants continues to decline, which doesn’t support simply chasing short positions.

Derivatives trading reminder: Today’s priority isn’t about predicting direction, but avoiding three types of mismatches

First,An increase in street float does not mean new capital is entering the market immediately.Market observations use street float data from the previous day's close, which should be understood as lagging position traces.

Second,A heavy concentration zone does not equate to support or resistance.It reflects where product holdings are concentrated, but whether the underlying stock can hold its level still depends on that day’s high/low, moving averages, and short-term price action.

Third,Strong stocks are not necessarily suitable for knock-in levels that are very close.For highly volatile stocks like China Hongqiao and BYD, even if your directional call is correct, interim volatility could cause significant losses to the product first.

Among today’s five focus stocks, Alibaba and China Life show relatively intact short-term trends; BYD is still confirming its breakout; China Hongqiao is better suited for observation as a high-volatility trading candidate; and Tencent needs to first confirm whether it can stabilize around HK$447.

Product overviews can be used to further compare strike prices, moneyness, leverage, implied volatility, and distance to knock-in. What you truly need to avoid is never just getting the direction wrong once—it’s making a slightly incorrect call on the underlying while selecting product terms that are overly aggressive.

Are you paying more attention today to whether Alibaba's upward momentum continues, or Tencent's support near HK$447?

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