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HK Warrants & CBBCs Notes: Hang Seng Index up, HSTECH also up—but warrant/CBBC money is playing two completely different games
Today’s Hong Kong market looked quite pleasant on the surface. The Hang Seng Index rose, and so did the Hang Seng Tech Index (HSTECH), with tech stocks, resource stocks, and healthcare stocks all showing strength. If you only look at index movements, many retail investors might easily draw a simple conclusion: the market has turned bullish—just buy calls or bull certificates and you're done. However, when you put together the underlying stock trends, warrant open interest, and CBBC open interest, the picture is actually far from consistent. The Hang Seng Index truly saw fresh money chasing the rally, while HSTECH appears to have approached resistance levels, with funds starting to pull back. This distinction is crucial for tomorrow's trading strategy.
Hang Seng Index $Hang Seng Index (800000.HK)$ : Trend is relatively strong, but you're now chasing resistance—not a low entry point
The Hang Seng Index closed at 25,915.82 points. Product data shows:
Today, the Hang Seng Index reclaimed its 5-day moving average. Call warrant open interest rose for the second consecutive day, increasing by 7.02% in a single day; bull certificate open interest surged even more, rising for the fourth straight day with a single-day jump of 12.28%. Meanwhile, put warrant open interest fell by 1.45%, and bear certificate open interest dropped sharply by 18.57%. This combination clearly indicates: the index moved higher, call warrants saw new buying, bull certificates attracted fresh capital, while puts and bears saw outflows. Thus, short-term sentiment is clearly bullish.
But here comes the critical question. The Hang Seng Index is currently at 25,915 points, just about 58 points away from its first resistance level at 25,974. In other words, if you enter now to chase bull certificates, you're not betting on a rebound from a low—you're directly betting on an immediate breakout. These are two entirely different trades with vastly different risk profiles.
Key considerations for tomorrow’s positioning
– If the HSI breaks above 25,974 and sustains the move rather than quickly reversing, the next target zone would be 26,300 to 26,352 points.
– Conversely, if the index is again rejected at 25,974 but holds above 25,730, this phase should still be viewed as high-range consolidation, not a signal to immediately switch to buying bear warrants.
– A genuine sign of weakening would be a break below 25,730. If that level is breached, the next support zone to watch is around 25,110, and bull warrant positions should start being tightened.
Representative products
– Call warrants: UBS Group 29814, Guojun 13045, Citi 14392
– Put warrants: UBS Group 13336, BNP Paribas 13283
– Bull certificates: Morgan Stanley 62650, DBS 62208
– Bear certificates: BNP Paribas 60061, Morgan Stanley 53394
The major concentration zone for HSI bull warrants is between 25,200 and 25,399, while the bear warrant heavy zone lies between 26,300 and 26,499—coinciding closely with the second resistance level at 26,352. Therefore, if the market breaks above 25,974, the next truly actionable observation range isn’t just any round number like 26,000, but specifically the 26,300–26,500 band.
Hang Seng Tech Index $Hang Seng TECH Index (800700.HK)$ : The index is rising faster, yet long-side capital is actually exiting
The Hang Seng Tech Index closed at 4,933.07, posting a larger gain than the HSI. Product data shows:
Judging purely by price action, the Hang Seng Tech Index appears stronger than the HSI. However, derivative flows tell a different story: Call warrant open interest declined for two consecutive days, dropping 14.68% in one day; bull warrant open interest has fallen for three straight days; meanwhile, put warrant open interest has risen for three days in a row. In short: the index is going up, yet call positions are decreasing, bull positions are shrinking, and put positions are increasing. This pattern doesn’t necessarily mean the tech index has peaked, but it does indicate one thing—at least until it reaches 4,948.5 to 5,000, the market may be reluctant to chase prices higher at these elevated levels. Therefore, the biggest risk for the Hang Seng Tech Index right now isn’t getting the direction wrong—it’s entering at a poor price point.
How should we position ourselves reasonably for tomorrow?
– If it breaks above 4,948.5 points, the next target is 5,000 points—this would be a breakout trade.
– If it pulls back to 4,886 points and holds steady, this would be a pullback trade.
– However, buying calls directly near 4,933 points actually exposes you to two risks: immediate resistance overhead, and if the market retreats, the first support level is at 4,886 points.
Representative products
– Calls: UBS Group 28145, Morgan Stanley 28379
– Puts: UBS Group 28144, Citi 26883
– Bear warrants: UBS Group 57828, Morgan Stanley 60627
There are currently no suitable Hang Seng Tech Index bull warrants available in the market, so call warrants are a more direct instrument when bullish on the index.
Another stock worth watching today: China Life Insurance $CHINA LIFE (02628.HK)$
China Life Insurance rose 2.74% today, closing above all major moving averages. The underlying stock performed well, with open interest in call warrants rising for two consecutive days, and bull warrant open interest also increasing for two straight days. However, bear warrant open interest surged 31.43% in a single day, indicating growing market divergence on whether the stock can sustain levels above HK$29.
Product Data
– Current Price: HK$29.26
– Upside Probability: 57%
– Downside Probability: 43%
– Support Levels: HK$28.64 / HK$28.48
– Resistance Levels: HK$29.34 / HK$29.36
The key challenge is that the current price is just HK$0.08 below the resistance level of HK$29.34. Buying calls now isn’t buying near support—it’s betting on a breakout right before resistance. That’s not necessarily wrong, but you must be clear about what scenario you’re positioning for.
Three more reasonable approaches
1. Enter only after breaking above HK$29.36;
2. Buy only if price pulls back and stabilizes between HK$28.48 and HK$28.64;
3. Only consider short-term put warrants or bear certificates if there is clear resistance between HK$29.34 and HK$29.36.
Representative products
– Call warrants: Morgan Stanley 14673, UBS Group 14644, HSBC 15216
– Put warrants: Citi 29867, Huatai 29008
– Bull certificates: HSBC 67545, Morgan Stanley 64886
– Bear certificates: UBS Group 53040, HSBC 69383
Key takeaway for today
Both the Hang Seng Index (HSI) and Hang Seng Tech Index (HSTECH) rose today, but warrant fund flows moved in different directions. HSI saw long positions increase alongside the index; meanwhile, HSTECH appeared to be approaching resistance, with existing long positions starting to unwind. Therefore, don’t blindly buy call warrants just because the indices rise tomorrow. Ask yourself first:
– Am I waiting for a breakout?
– Or am I waiting for a pullback?
– If support is broken, will I actually exit my position?
Complete support/resistance levels, risk-reward ratios, and representative products have been compiled in the 'Warrant & CBBC Product Overview.' Before selecting a product, assess its price position first and then review its terms—this approach is far more practical than focusing solely on leverage.
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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