FXI vs CAF

rim

As of now, CAF = 30.xx  whilke FXI = 28.xx

My play:  short CAF and long FXI, same amount of share, betting that FXI will surpass CAF in the near future.

Three reasons:

1. both CAF and FXI contain majoy blue chip companies in China. However, H share has much cheaper valuations comparing to A shares.
2. CAF is selling at a almost 20% premium, its NAV is around $25
3. While the shanghai market looks super strong this year, it seems to me that the rally is a little overextented, maybe a correction is coming?

marketstudent

ding

leftright

ding

ULTRAETF

I longed FXI, shorted EEB,  worked good

源济

olderfrog

要相信党，相信政府。

dara

rim

CAF被烧回29.xx了， FXI正在向29.XX逼近，革命尚未成功，同志们继续努力！

qiangge

多吉

As of now, CAF = 30.xx  whilke FXI = 28.xx

My play:  short CAF and long FXI, same amount of share, betting that FXI will surpass CAF in the near future.

Three reasons:

1. both CAF and FXI con ...
rim 发表于 2009-3-31 12:07 PM

Sounds like a good trading strategy. I assume you got to have large positions to make it meaningful. How long are you going to hold on the pair?

rim

qiangge 发表于 2009-3-31 17:10

thanks!  I plan to hold until we see one significant drop of CAF (which probably will happen after a big down day in Shanghai). My thesis is that with the valuation difference between CAF and FXI, FXI should be more resistant to downside movement.

passer

RIM, SHORT 的CAF 怎么办? 要出人命了

我现在真怀疑CAF 的庄经常到股版来, 看见了你的贴.

rim

俺还扛着，昨天收盘CAF NAV 25.27， 昨晚上海涨了点， 但也不会超过26. 目前CAF 32，完全是赌A股要继续狂涨。CAF同时也受美国大盘影响很大。我耐心等A股开始回调，然后如果第二天美国大盘也跌配合一下，CAF就暴跌。

短期CAF的确比较暴力，中期讲FXI应该能hedge CAF的，我觉得亏也不会亏太多。如果还是不放心的话，加买几个FXI leap OTM call。我无法想象CAF一路涨，FXI不动或跌的可能。

olderfrog

not to thread crapping, just want to throw couple things out there to consider,

   SSEC has no shorting.  have to make money by buy and sell higher
   H shares has been undervalued to A share for a looooong period of time already.  If your time frame is relatively short, this is not a good reason.

I do have some CAF postition.

tomorrow

请问, 那个trader可以short CAF? Etrade不行. 谢谢

rim

scottrade can。

rim

not to thread crapping, just want to throw couple things out there to consider,

   SSEC has no shorting.  have to make money by buy and sell higher
   H shares has been undervalued to A share for ...
olderfrog 发表于 2009-4-1 13:43

You are right.

My plan is half strategic, half speculative.

The strategic part is presented above, I believe at some point (maybe in 3-5 years), A share and H share should convenge in their valuation.  The speculative part is that I believe CAF has run too far too fast based on the assumption that A share is going to 3000. Any big drop in A shares should cause some "panic" selling of CAF. We may see a >10% single day drop in CAF price in the near future.

ULTRAETF

今天想烧一点CAF, 可是借不到股票

cottontail

I long ETF300 in SSEC and short CAF with same cash amount ... Since CAF is way overvalued!

rim

到目前为止：

CAF = 32.xx
FXI = 31. xx

跟我开始set up时比，差距略有缩小，虽然CAF的确涨得吓人。CAF我觉得以显疲态，除非晚上A股再上演升龙霸。 我继续坚持原thesis，等FXI超越CAF。