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Chinese stocks: Best opening in years with 80% rally
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doctorpot1 joined discussion · Nov 2, 2022 07:47

Rumour: China to open up or loosen covid zero policy?

Yesterday, there was a huge rally in the Chinese stock market, fueled by rumors that China is planning to open up and doing away with their covid zero strategy, as they are ramping up vaccination. It is all just rumor.
Today, Singapore just signed 19 agreements with China and 1 of them is to bring air flights between China and Singapore back to pre-covid level gradually. This seems to gives some signs of China plans to gradually open up.
On top of that, we all know that US inspectors are now in China doing their audit. If successful, Chinese companies can avoid being delisted in the US stock market. Everyone is very quiet on this, no one is talking about it.
Lockdown fears and delisting fears have had a very negative impact on the share price of Chinese stock, on top of the many other fears. So if the rumor about opening up is true, that could remove one big negative overhang on all Chinese stock. Plus, if the audit is successful, another huge overhang will be removed. That should cause the share price to sky rocket, and I believe it will be a much more powerful rally than the one in March of 2022.
All Chinese ADR like $NIO Inc (NIO.US)$, $Alibaba (BABA.US)$, $Futu Holdings Ltd (FUTU.US)$, $UP Fintech (TIGR.US)$, $PDD Holdings (PDD.US)$, $Baidu (BIDU.US)$, $Bilibili (BILI.US)$, $Tencent (TCEHY.US)$, should benefit from the removal of the delisting overhang, and the opening up of China's economy. However, for those who had been investing in Chinese ADR for a while now, we all know that low can go lower. We had experience it many many times before.
For those Chinese stocks that I had been HODLing, I'm still continuing to DCA on them, and also selling covered CALL options on them at very high strike price while waiting for the rally to come. It gives me some pain relief for a red red portfolio I'm also considering between buying long dated CALL options on some stocks too.
Rumour: China to open up or loosen covid zero policy?
Rumour: China to open up or loosen covid zero policy?
Why CALL options, instead of buying the stock directly?
This is because buying the shares outright is expensive, and using options I would just need a small fraction of the cost. E.g. Buying 100 shares of $Alibaba (BABA.US)$ would cost $6,586, but buying a CALL option that expires in Jan 2024, would only cost $1,611. So if I'm wrong, and more black swan events (*cough* war *cough*) were to happens, I could lose lesser money. But if the rumor is true, then I get to enjoy the benefit and convert the CALL options into shares and then ride the wave
Plus, if I don't have the cash to buy the shares yet, it gives me time to work hard and save the money to buy the shares in Jan 2024 So paying some money to chope the shares first, while working hard to save money to buy the shares
However, regardless of buying CALL options or buying the stocks directly, I will definitely still sell covered CALL option at crazy high strike price, to help lower the cost a bit
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  • Altmed63 : I don't see any signs of China loosening up their lockdowns. The "Zero COVID-19" policy is not effective, other than slowing the spread, as the virus is essentially airborne, and it's everywhere. They would have to shut down their entire economy, their travel their borders, and so on to stop it. They would have to stop all commerce, and people wouldn't survive, nor would the economy, nor the country. Sadly, COVID-19  has become endemic. It also lives on surfaces for days or weeks, so it's here to stay, unfortunately.
      People need to wash hands, minimize very close contacts to reduce viral loads, thus minimizing illness when it does spread.
      Vaccines seem to have limited effectiveness time of seemingly only a couple of months. The virus seems to be getting more transmittable, and less lethal. Those with co-morbidities need to be particularly cautious, as infections can still be fatal.
      I think people want the truth about the Gain of Function research that was going on in the Wuhan Institute of Virology, and want assurances that it will be outlawed and stopped worldwide.
      Gain of Function research is dangerous, reckless and has never produced a vaccine that has been helpful for naturally occurring viruses.
     Genetically editing organisms needs to be stopped.

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  • doctorpot1 OP Altmed63 : but the news seems to suggest otherwise though. like you said if their goal is to shut down everything, then won't the agreement they just signed with Singapore a contradiction? because the agreement will send a lot of Singaporean with or without the virus into their country and spread it.

    but all these are rumors so good to know but best to wait for official news hehehe [undefined][undefined]

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  • Octamundo : There is zero evidence COVID-19 is formic please name your source for that..

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  • doctorpot1 OP Octamundo : sorry which source are you looking for? the rumor of opening up? or the agreement that was signed with SG?

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  • MoreOfTheSame : Fake news again? Anyone in China that think iit's ok to let old people die like those in Florida and New York is a troll.

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  • doctorpot1 OP MoreOfTheSame : the open up news is just rumors as clearly stated, but the signing of the agreement is real. it is in the state media, with a huge signing ceremony. You can watch the video of the news attached to this post.

    However, that doesn't mean they will open up, but it does begs the question, if you are not opening up why sign a deal to have more flights between the 2 countries? So some food for thought, actions speaks louder than words and propaganda [undefined][undefined][undefined]

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  • doctorpot1 OP MoreOfTheSame : Hahaha those premises doesn't add value to the argument [undefined] If a country does not want to open up, then allowing millions of travellers to and fro is a contradiction. But we never know yet, just have to wait and see [undefined]

    information is just information, you can analyse it or ignore it [undefined]

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  • Daniel Christian : COVID BULLSHIT

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  • Octamundo doctorpot1 OP : Your source for COVID-19  being fomic-  Passed along by contact with a surface like a table surface. Sorry I wandered off the point of the post lol. Market opens in 2 minutes here In the states!

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  • doctorpot1 OP Octamundo : I didn't say that leh. My whole post is about rumor of China opening up hahahaha nothing about the virus. are you referring to passionate Rhino_107 comment? if it is then have to ask him or her already hahahaa [undefined]

    yea HK inflow of US$3.7b from funds on the rumor. shiok. Alibaba, JD.com’s 12 per cent surge lifts Hong Kong stocks to best week since 2011 as mainland China funds load up amid zero-Covid speculation | South China Morning Post

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doctorpot1
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