Hong Kong stocks are rebounding—what sectors deserve attention?

港股窩輪Jenny

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Warrant Market Focus Stock Watch | Tencent and Meituan surge sharply—the real focus isn’t which stock rose the most

On July 15, sentiment in the Hong Kong stock market clearly improved, with the Hang Seng Index rising 1.4%. Key stocks such as Tencent, Meituan, and Innovent Bio all posted significant gains.

However, when we examine the underlying stock price movements, changes in warrant/open interest positions, and the densest regions of bull/bear warrants together, we find this rally isn’t simply a case of 'rising share prices attracting bullish bets.'

For some stocks showing strong upward moves, bullish open interest actually declined; for others approaching bearish warrant concentration zones, bearish positions began to increase. These open interest figures reflect positions carried over from the previous trading day and shouldn’t be directly interpreted as intraday fund flows. Nevertheless, they help us understand where the market had originally positioned itself and which positions have become sensitive following the price increase.

Tencent $TENCENT (00700.HK)$ : Share price rose nearly 4%, yet bull warrant open interest decreased.

Tencent closed at HK$474, up 3.9%, hitting an intraday high of HK$476.4 with turnover nearing HK$15.9 billion and net inflows from major funds amounting to approximately HK$1.396 billion. Although its 5-day performance remains slightly down by 1%, the 10-day gain has already reached 10.28%, indicating a clear strengthening of short-term momentum.

Market observations show that Tencent’s call warrant open interest has risen for three consecutive days, increasing by 0.76% most recently; put warrant open interest, on the other hand, has declined for four straight days, dropping 20.94% in a single day. Meanwhile, bull warrant open interest has fallen for two consecutive days, while bear warrant open interest increased by 5.37%.

This set of data warrants close attention.

While there is still accumulation of bullish positions in the derivative warrants segment, the decline in bull warrant open interest may indicate that some short-term bull warrants deployed earlier have already taken profits following the sharp price rise. The increase in bear warrant open interest suggests some traders are beginning to position for a pullback near current elevated levels.

Tencent’s bear warrant concentration zone lies at HK$490 to HK$494.8, about 3.4% to 4.4% away from HK$474; the bull warrant concentration zone, meanwhile, is much lower, between HK$400 and HK$404.8.

Therefore, Tencent's current support and resistance zone is not at the bull warrant call-back level, but rather around HK$490 above.

For those bullish on Tencent, consider slightly in-the-money call warrants with sufficient time to expiry, or bull warrants whose call-back price is not too close to the current share price. If the stock price only gradually tests HK$490, deep out-of-the-money call warrants may not fully capture the upside.

On the bearish side, note that while HK$490 is a key concentration zone for bear warrants, the stock price remains in an upward trend. Prematurely chasing bear warrants solely because the price is approaching this heavy-position zone still carries the risk of further upside that could push the price closer to the call-back level.

Meituan $MEITUAN-W (03690.HK)$ : Today’s most direct battleground between bull and bear warrants

Meituan closed at HK$83.40, up 5.30%, hitting an intraday high of HK$84.45, with a volume ratio of 1.72 and turnover of approximately HK$7.245 billion, including net institutional inflows of about HK$180 million.

Meituan’s gains aren’t just limited to today—its 10-day cumulative gain stands at 21.75%, and it has risen 6.58% over the past 20 days. Market observers also note that Meituan has posted two consecutive gains and is approaching the upper Bollinger Band.

In terms of warrant open interest:

– Call open interest has increased for two consecutive days, most recently rising by 0.20%

– Put warrant outstanding positions declined for the second consecutive day, down 0.55% most recently

– Bull warrant outstanding positions declined for the third consecutive day, down 4.97% most recently

– Bear warrant outstanding positions increased by 6.80%

This pattern resembles Tencent’s structure: after a sharp rally in the underlying stock, some bull warrant positions may have already exited, while short positions are beginning to build.

Meituan’s bear warrant concentration zone is at HK$87 to HK$87.95, only about 4.3% to 5.5% away from the current price; the bull warrant concentration zone is at HK$66 to HK$66.95, which is considerably farther away.

Therefore, among the current group of spotlight stocks, Meituan has the clearest offensive and defensive positioning.

If the share price breaks above HK$84.45 and continues its upward momentum, it will directly test the dense bear warrant zone around HK$87. For bullish investors, bull warrants should avoid products with knock-in prices too close to the current market price; however, since the existing bull warrant concentration zone is already quite distant, the leverage offered by some bull warrants in the market may not be particularly high.

If using call warrants, one must compare the degree of moneyness and implied volatility. After Meituan’s recent sharp rally, deep out-of-the-money, high-leverage products may appear attractive, but if the stock price consolidates near the upper Bollinger Band first, time decay and changes in implied volatility could cause these products to underperform the underlying stock.

If considering a short position, one should first observe whether the level around HK$87 truly forms resistance, rather than heavily shorting prematurely at HK$83–84.

Innovent Bio $INNOVENT BIO (01801.HK)$ : The stock price has reached the doorstep of the bear warrant concentration zone.

Innovent Bio closed at HK$97.05, up 7.77%, with an intraday high of HK$100.4, marking a new year-to-date high. Trading volume amounted to approximately HK$3.809 billion, with a volume ratio of 2.75 and net institutional inflows of about HK$471 million.

According to CSV data, Innovent Bio gained 12.59% over 5 days, 21.92% over 10 days, and 25.39% over 20 days, making it the strongest momentum stock among current market focus names.

However, its CBBC (callable bull/bear certificate) positioning is also the most sensitive.

The bear warrant concentration zone for Innovent Bio lies between HK$100 and HK$100.9, and the intraday high of HK$100.4 has already entered this concentration zone. The bull warrant concentration zone, meanwhile, sits at HK$67–67.95, far from the current price.

Market observations show that the open interest in Innovent Bio call warrants increased by only 0.22%, while bull warrant open interest declined by 8.44%; bear warrant open interest rose by 1.36%.

The stock price rose nearly 8%, yet call warrant open interest increased only slightly, and bull warrant open interest dropped notably, reflecting a lack of consensus among market participants to chase long positions—some funds may have even taken profits early. Meanwhile, bear warrant open interest has started to rise, indicating clear bullish-bearish divergence around the HK$100 level.

For investors bullish on Innovent Bio, the main issue here isn’t directional view but product cost. Related call warrants typically carry high implied volatility; chasing prices after a sharp rally can easily expose investors to both underlying stock pullbacks and declining implied volatility.

Although bull warrants are not subject to time decay or implied volatility risk, if the knock-out price is set too far away, the effective leverage could be relatively low.

In other words, Innovent Bio may continue to strengthen, but at this stage, product selection requires more caution than simply following the directional trend. If the stock stabilizes above HK$100, the reference significance of the previous heavy bear warrant zone will diminish; if it fails to break out and falls back below HK$97, short-term volatility could spike rapidly.

HSBC $HSBC HOLDINGS (00005.HK)$ : After hitting a new high, the HK$160 bear warrant zone is coming into view

HSBC closed at HK$155.30, up 1.77%, reaching an intraday high of HK$156.3 and setting a new all-time high. It gained 2.24% over 5 days, 5% over 10 days, and 6.52% over 20 days, with a volume ratio of 1.55—showing a more stable trend than many tech stocks.

Market observations show that open interest in both HSBC calls and puts has been rising consecutively; bull warrant open interest has risen for two straight days, while bear warrant open interest has climbed for three consecutive days, most recently increasing by 8.18%.

This indicates the market is not overwhelmingly bullish. After the stock hit a new high, both bullish and bearish positions are being added, with bear warrant accumulation particularly pronounced.

HSBC bear warrants have a major concentration zone at HK$160 to HK$164.9, approximately 3% away from the current price; the bull warrant concentration zone is at HK$100 to HK$104.9, which is much farther away.

HK$160 thus becomes a key psychological and product-related level in the short term.

If HSBC continues to rise steadily, bear warrants near HK$160 may start facing knock-in pressure. Bullish investors could consider slightly in-the-money call warrants or bull warrants with sufficient distance to their knock-in levels. Given that HSBC’s volatility is typically lower than that of tech stocks, deeply out-of-the-money call warrants may not effectively capture the stock’s moderate upside.

Bearish investors should pay close attention to the knock-in prices of bear warrants. If the share price rises by just another ~3%, it will approach the heavily concentrated zone at HK$160. Choosing products with knock-in levels also near HK$160 could result in early termination due to short-term gains, even if the directional view ultimately proves correct.

Alibaba $BABA-W (09988.HK)$ : After six consecutive gains, HK$115 marks the beginning of a sensitive zone from a structured products perspective

Alibaba closed at HK$113.40, up 2.35%, marking its sixth straight gain and approaching the upper Bollinger Band. It rose 5.49% over five days and gained 22.13% over ten days, with trading volume of approximately HK$12.752 billion and net institutional inflows of about HK$261 million.

However, the market's warrant positioning has not fully followed the upward trend:

– Outstanding call warrants decreased by 1.49%

– Outstanding put warrants increased by 1.01%

– Outstanding bull certificates have risen for two consecutive days, with the latest increase at 9.39%

– Outstanding bear certificates decreased by 3.38%

This indicates that bullish positions are more concentrated in bull certificates rather than call warrants.

The major concentration zone for Alibaba bear certificates is at HK$115 to HK$119.9, with the stock price already approaching the lower end of this range; the major concentration zone for bull certificates is at HK$85 to HK$89.95, which is farther away.

Therefore, whether Alibaba can break above HK$115 next is not just a technical issue—it will also impact the pressure on bear certificate positions.

For bullish investors, if the expectation is only a gradual rise toward HK$115–120, bull certificates may offer more direct sensitivity than call warrants; however, one should still avoid selecting products with knockout levels too close simply because of high leverage.

Regarding call warrants, investors should first compare the degree of moneyness and premium. If Alibaba-related products are generally out-of-the-money, even a HK$2–3 rise in the underlying share price may result in a weaker-than-expected product response.

Bearish investors can wait to see whether the HK$115 level acts as resistance. If the share price clearly breaks through and stabilizes above this level, the previous heavy short-side warrant zone may shift from a reference resistance area to a potential knockout pressure zone.

Today's derivative trading reminder

All five focus stocks this time share a common characteristic:The underlying stocks are rising, yet street inventory of bull certificates isn’t necessarily increasing in tandem—in fact, bear certificate positioning is starting to become more active.

This doesn’t necessarily mean the market is about to turn downward. Street inventory is a lagging indicator, reflecting earlier positioning and changes in holdings rather than serving as a real-time predictive tool.

We interpret it this way:

– Tencent, Meituan, and Innovent Bio: After sharp rallies, watch whether the heavy bear warrant zones can be broken through;

– HSBC: The uptrend is steadier; HK$160 is the next sensitive level from a product perspective.

– Alibaba: After six consecutive gains, the stock is approaching HK$115. Bull warrant funding has increased, but outstanding call warrants have declined.

When positioning, it’s worth confirming three things first:

1. How far the underlying stock is from the major concentration zones of bull or bear warrants;

2. Whether the warrant’s knock-out price is closer than key technical support or resistance levels;

3. Whether changes in street inventory reflect new capital entering the market or are merely remnants left behind after existing positions took profits and exited.

We believe everyone already has their own views on the outlook for these stocks. What we’re more interested in knowing is: this time, will you pay closer attention to Tencent or Meituan breaking through bear warrant zones, or do you think the bullish-bearish battle around Innovent Bio near HK$100 is more worth watching?

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