Tencent's Stock Traders Read All the Signs That Analysts Ignored
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Thursday could have been a whole lot worse for Hong Kong’s equity market.
While Tencent Holdings Ltd.’s shock profit slump caught almost all analysts by surprise, traders were far more prepared. They’d been selling the shares at the fastest clip since February, paying up for bearish derivatives and increasing their short positions to hedge against further declines. That paid off: the stock was down as much as 5.1 percent in early Hong Kong trading Thursday, exactly the move predicted by the options market.