China snowball knock-ins fuel futures sell-off
Market participants say issuer re-hedging has helped drive Chinese equity indexes lower
Re-hedging of China’s popular snowball structured products in the futures market is said to have contributed to the ongoing rout in the country’s equity markets, according to market participants.
China’s CSI 500 index, one of the most popular underlyings for snowball products, dropped by 4.7% on Monday (January 22) to its lowest level in more than four years, resulting in up to a third of products at some issuers hitting downside so-called knock-in barriers that can result in potential losses for
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