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
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Markets
Currenex loses US court bid to reveal XTX trade secrets
Judge also rules the venue must reveal its own matching code in class action case
Intraday FX swaps could signal new dawn for liquidity management
Seedling market could help banks pre-fund payments in near-real time and reduce HQLA requirements
Isda calls for India IM delay
Rules for third-party custodians still to be finalised less than one month before initial margin rules go live
FSB exec dismisses leverage cap proposals for NBFIs
Tackling excessive leverage requires a nuanced approach instead of a broad cap, says Martin Moloney
US jobs shock leads to steepener unwinds
Rates investors caught out after October jobs surprise
Goldman Sachs retakes top FXO dealer spot with mutual funds in Q2
Counterparty Radar: Trades with SEI Investments boosts US bank to top spot
UBS embraces ‘narrative alpha’ for new form of sentiment strategy
NLP engine traces how stories spread, instead of counting words
The curious case of the revealing orders
Oxford academics have found evidence pointing to collusion on a European exchange, but market-makers aren’t wholly convinced