Photo: Courtesy of Bloomberg
If Chinese stocks swing upward, hedge fund managers Paul Tudor Jones and Louis Bacon will both post massive wins.The pair loaded up on options on the iShares FTSE China 25 ETF in the first quarter; both Tudor Investment Corp. and Moore Capital snapped up at least 7 million options, according to Bloomberg.
“The cost of buying options* pegged to Chinese markets has fallen along with volatility there,” said one senior portfolio manager who’s firm specialises in China. “A lot of people are taking advantage of the low volatility to make plays. There is a big reversion trade expected, where the Chinese markets would catch up in terms of performance.”
Some funds are betting against the FTSE 25 though. Jabre Capital Partners and Ionic Capital Management will both profit if the index tumbles further; since October, the index has slid by approximately 3.3%, according to Bloomberg.
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