Chinese shares are surging this yr, but a single trader thinks the rally will finally come to a near.
On Thursday, a trader purchased ten,000 of the China significant-cap ETF (FXI) November 34-strike places for 89 cents each individual. This is a nearly $one million bet that the FXI could fall 13 % by November expiration.
But Dan Nathan of RiskReversal.com sees no issues in the charts for FXI, major him to imagine that the trader was really obtaining disaster protection in the party of a pullback in the Chinese stock market. In fact, Nathan believes that the charts are really displaying that FXI could strike former highs.
“If you go all the way back again to 2012, we are having to some levels here [that could climb back again to those people 2012 highs in FXI, suggesting] you can find some home to operate in this detail,” he reported Thursday on CNBC’s “Quickly Funds.”“I guess someone is [searching for some disaster protection].”
FXI is at present up twelve % yr to day, surging with the relaxation of the rising marketplaces.