If the Options Market Is Right, China's Stock Rescue Is Doomed
- Cost of bearish contracts on China A-share ETFs reaches record
- Median stock valuation is the highest among 10 largest markets
Judging China’s Volatile Equity Markets
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Options traders have never been so pessimistic on China’s stock market, betting the government’s renewed effort to prop up share prices is doomed to fail.
The cost of bearish contracts on the China 50 exchange-traded fund has surged to the highest level versus bullish ones since they started trading in Shanghai six months ago. The so-called skew also climbed to a record for a similar ETF in the U.S., even as government buying drove China’s benchmark index to a 10 percent rally in the final two days of last week.