HSBC’s Wild Ride Pushes Hedging Costs to Highest in a Decade, , on October 5, 2020 at 3:51 am

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On October 5, 2020
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(Bloomberg) — Once one of Hong Kong’s steadiest stocks, HSBC Holdings Plc is now more than three times as volatile as the city’s benchmark. Investors are betting that will continue.Options traders in Hong Kong are pricing in a volatile October, snapping up both bullish calls and bearish puts on HSBC. The cost of one-month contracts tied to HSBC’s Hong Kong shares has climbed to near the highest since May 2009 relative to those on the city’s Hang Seng Index, according to data compiled by Bloomberg. That indicated high demand to protect against further volatility in the stock.Shares of HSBC rose 5% in Hong Kong to HK$31.30 as of 11:47 a.m. local time, paring an earlier gain of as much as 7.1%. That compared with the 1.6% rise in the benchmark Hang Seng Index.“HSBC’s shares jump today is quite a surprise,” Steven Leung, an executive director of Uob Kay Hian (Hong Kong) Ltd., said by phone. “We haven’t seen any positive news other than Ping An increasing its stake in the bank and the outlook for the banking industry remains dim.”The shares plunged to a 25-year low two weeks ago amid increasing concerns political tension in China could derail its expansion plans in that country and as low interest rates and the virus outbreak weigh on its bottom line.That prompted its biggest shareholder, China’s Ping An Insurance Group Co., to snap up 10.8 million shares to boost its stake to 8%, sparking the biggest one-day jump in more than a decade.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.,

HSBC’s Wild Ride Pushes Hedging Costs to Highest in a Decade(Bloomberg) — Once one of Hong Kong’s steadiest stocks, HSBC Holdings Plc is now more than three times as volatile as the city’s benchmark. Investors are betting that will continue.Options traders in Hong Kong are pricing in a volatile October, snapping up both bullish calls and bearish puts on HSBC. The cost of one-month contracts tied to HSBC’s Hong Kong shares has climbed to near the highest since May 2009 relative to those on the city’s Hang Seng Index, according to data compiled by Bloomberg. That indicated high demand to protect against further volatility in the stock.Shares of HSBC rose 5% in Hong Kong to HK$31.30 as of 11:47 a.m. local time, paring an earlier gain of as much as 7.1%. That compared with the 1.6% rise in the benchmark Hang Seng Index.“HSBC’s shares jump today is quite a surprise,” Steven Leung, an executive director of Uob Kay Hian (Hong Kong) Ltd., said by phone. “We haven’t seen any positive news other than Ping An increasing its stake in the bank and the outlook for the banking industry remains dim.”The shares plunged to a 25-year low two weeks ago amid increasing concerns political tension in China could derail its expansion plans in that country and as low interest rates and the virus outbreak weigh on its bottom line.That prompted its biggest shareholder, China’s Ping An Insurance Group Co., to snap up 10.8 million shares to boost its stake to 8%, sparking the biggest one-day jump in more than a decade.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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