China-linked ETFs draw bullish options bets ahead of Biden-Xi meet

NEW YORK, Nov 15 (Reuters) - U.S.-listed exchange traded funds focused on China are seeing bullish options activity as investors await U.S. President Joe Biden's meeting with Chinese leader Xi Jinping on Wednesday for signs of easing friction between the two superpowers...

Some of the bullish positions included call options on the Xtrackers Harvest CSI 300 China A-Shares ETF with a $27 strike price - some 6% higher than where the fund trades today - set to expire Friday...

While some of the upside positioning may be tied to a rally in the broader equity market - including a Tuesday surge that saw the S&P 500 rise 1.9% on bets that the Federal Reserve is done hiking interest rates - investors are also likely speculating on a positive outcome from the meeting between Biden and Xi, Sosnick said...

"The bullish positioning in ASHR and FXI is almost certainly the result of pre-meeting enthusiasm since it is highly biased to near-term upside calls and the positioning occurred prior to yesterday's run-up," Sosnick said.. Biden and Xi arrived in San Francisco on Tuesday, where they were set to hold their meeting on the sidelines the Asia-Pacific Economic Cooperation (APEC) summit..

Daniel Kirsch, head of options at Piper Sandler, said recent bullish options flows into KWEB may be to do with a combination of enthusiasm ahead of the Biden-Xi meeting as well as results from Chinese e-commerce companies JD.com and Alibaba . On Wednesday, JD.com reported a surge in third-quarter profit, while Alibaba results are expected after the close of trading...

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