Traders Bet Big on China ETFs with Call Options: Strategy Recap
This is the TradingFlow Team, and this article will discuss the strategies related to the recent operations of traders in Chinese ETFs.
Recently, Chinese assets have been making notable moves in the market.
Last Monday (December 9), the Nasdaq Golden Dragon China Index closed up 8.54%, marking its largest single-day gain since 26th September. Signs of capital flows betting heavily on China ETFs began emerging as early as late November, with traders making significant bets on call options.
For example, on 2nd December, a trader purchased approximately 210,000 call options for the Direxion Daily CSI 300 China A Share Bull 2X ETF ($CHAU), spending an estimated $55 million at average prices. This level of activity stands out sharply, as $CHAU typically sees very little options trading.
Except $CHAU, other China-related ETFs like $YINN and $FXI have also shown unusual call option activity. According to the latest open interest (OI) data, traders appear to have closed only a small fraction of their positions, leaving the majority still open.
This article explores the capital flows behind the call options for $YINN, $CHAU, and $FXI, offering a closer look at the potential signals these trades reveal and retracing the steps of the "smart money".
$YINN
According to TradingFlow's Option Chain Explorer section, the $YINN call options set to expire on 16th January, 2026, with a strike price of $27, showed significant activity on 29th November. Specifically, open interest (OI) surged by over 90,000 contracts that day (kindly note that #OI DIFF indicates changes from the previous trading session).
Further investigation via TradingFlow's Contract Level Explorer reveals a steady inflow of large capital into these call options. As of this writing, based on the current OI data, traders have closed only a small portion of their positions, leaving the majority still open.
$CHAU
The first notable signs of large-scale bullish bets on $CHAU call options emerged on 3rd December, later than the unusual activity observed in $YINN.
Data shows that the $CHAU call option contract expiring on 16th May, 2025, with a strike price of $15, experienced a single-day open interest (OI) increase of up to 200,000 contracts. Similarly, as of now, a significant portion of these contracts remains open and unclosed.
$FXI
Several $FXI call option contracts have shown unusual activity. For instance, the $FXI call option expiring on 20th December, 2024, with a strike price of $32, saw a sharp increase in open interest (OI) on 29th November, adding 9,757 contracts—significantly higher than the previous daily changes, which were typically below 500.
After the initial surge in large-scale positions for this contract, additional notable inflows were observed on trading days such as 2nd December and 6th December. As of this writing, a significant portion of these contracts remains open, with only a small fraction closed.
Using the average price of this contract as a reference, traders who added nearly 10,000 contracts on 29th November could have seen unrealized gains exceeding 550% by 9th December, assuming the newly opened positions remained unclosed on that date. However, as of last Friday’s close, most of these positions are still open and are likely now in a losing state.
This activity has drawn significant market attention to the OI values of $FXI and the previously mentioned ETF-related call options. Are traders gearing up for the next leg higher? Stay tuned with TradingFlow for their next moves!
If you like this article, please subscribe. To use all the tools, start a free trial for 14 days now.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Before making any financial investment decisions, please ensure you thoroughly understand all aspects of the information and conduct your own research.
🎁 Bonus time 🎁 with Moomoo, one of the most cost-effective investment platforms currently on the market!
Click the link below to try moomoo and receive your welcome free stock and cash sweep bonus! 👉: https://j.moomoo.com/00IRhe