Deals
How to Make 23% Betting Hedge Funds Are Wrong on Chinese Stocks
- Structured products take advantage of high ETF borrow rates
- BNP, JPMorgan among banks selling notes to bullish investors
Empty desks and computers on the trading floor at the Shanghai Stock Exchange.
Photographer: Johannes Eisele/AFP via Getty ImagesThis article is for subscribers only.
Wagers against Chinese stocks have become so popular that banks are offering returns exceeding 20 percent to anyone prepared to take the other side.
The potential payouts, from firms including BNP Paribas SA and JPMorgan Chase & Co., come in the form of structured products tied to the CSOP FTSE China A50 exchange-traded fund in Hong Kong. The ETF, one of the world’s largest tracking domestic Chinese equities, is a favorite target of hedge funds and other bearish speculators who pushed short interest to a one-year high last month.