(Bloomberg) -- Investors snapped up bullish options on exchange-traded funds tracking Chinese equities as shares gained on speculation that the government will increase stimulus to bolster economic growth.
Chinese authorities announced plans for three top financial regulators including the People’s Bank of China to hold a briefing on the economy. Also, the central bank lowered a short-term policy rate. Disappointing economic data last month increased concern that China could miss its yearly growth target without additional support.
The one-month put skew — or premium for bearish options over bullish ones — on the iShares China Large-Cap ETF neared parity Monday for the first time since July amid a slew of call buying. Some 30,000 call options traded allowing the holder to pick up 3 million shares at $29.50 by Oct. 18, with November-expiry calls being bought as well.
The ETF gained as much as 2.7% at one point, and closed 2% higher at $27.68. Total call volume was the highest since July, and calls outnumbered puts by 3.5 to 1.
Investors also turned more bullish on the Xtrackers Harvest CSI 300 China A-Shares ETF, with 30,000 contracts of $24 calls changing hands. The ETF gained 0.5% to $23.09
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