Tencent Options Signal Biggest Post-Results Move in 11 Years
- Options market implying 7.1% move for Hong Kong stock Thursday
- Skew is at four-year high after the cost of put options soared
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Hong Kong’s equity traders haven’t been this nervous over Tencent Holdings Ltd.’s earnings in more than a decade.
They’ve been buying derivatives to protect against losses, with bearish puts now costing the most in four years relative to bullish contracts. With the Internet giant reporting fourth-quarter results after Wednesday’s close, the options market is now pricing in a massive 7.1% move either way for the shares when trading reopens. That would be the biggest move since at least 2009, according to data compiled by Bloomberg.