Hong Kong Dollar About To Pop ?

Discussion in 'Trading' started by Stockolio, Aug 12, 2019.

  1. Who is this stockolio idiot you talking about? the hkd peg had been on my mind for some years. I looked at some risk reversals on bloomberg, not liking the negative spread nor do i have access to fx options. wondering how else can i do it. Shorting the developers/banks are so expensive a carry, as I only see it as a longtail event.
     
    Last edited: Aug 15, 2019
    #31     Aug 15, 2019
  2. Why don't you hold a long usd/hkd cash position? Both funding rates are about equal, if at all you may actually get paid with a sizable position because lately hibor is edging up.

     
    #32     Aug 15, 2019
  3. Holding a long usdhkd position in IB will incur a substantial interest differential right? would be easy if there were listed futures, but obviously no commercial value for a pegged pair. see the peg as a diarrhea thing, once the dam starts to crack for some 5 sigma events, the shit just bursts through the pant without warning. Looking to hold some tissue just in case while not willing to incur more than 50bps carry pa.
     
    Last edited: Aug 15, 2019
    #33     Aug 15, 2019
  4. a) No, there won't be a significant interest differential. Last time you checked you might remember the two currencies are still pegged and hence interest rates are not that different.

    b) re interest and funding it makes zero interest whether you trade cash or futures. If futures did not have the interest differential priced in then there would be arbitrage opportunities, which there are not.

    c) USD 3m Libor is quoted at around 2.16% , 3m Hibor at 2.28%, similar spread should hold for overnight, hence, a long USD/HKD position pays on a gross basis. Unless you trade a mini position you will not incur much cost holding this position with IB, despite IB slightly marking up the cost.

     
    #34     Aug 15, 2019
  5. Nah, the IB markup/markdown are too much to carry an outright position for over a year, plus HKMA likely to squeeze the shorts. Considering some 0005.HK/HSBC.US option spreads to put it on if liquidity allows
     
    #35     Aug 15, 2019
  6. Hmm how is this supposed to be cheaper than a straight fx exposure? Optionality will cost a lot more than the tight interest rate spread

     
    #36     Aug 15, 2019
  7. luisHK

    luisHK

    ""Those kids are way beyond ill mannered, to display my disagreement with Beijing policies, when I give head to a Mainlander, I don't swallow anymore. That'll teach them !""
     
    #37     Aug 15, 2019
  8. luisHK

    luisHK

    To be fair it was already very hard to express any meaningful disagreement with Beijing when having family or business interests in the Mainland, and now it is becoming the same when one has interests in HK. People who have attracted the ire of Beijing have already been refused entry to HK, and it is likely to get worse
     
    #38     Aug 15, 2019
  9. It's hard to imagine for any sovereign nation to welcome foreigners who publicly and in official capacity call for the independence of a part of the country. If you refer to less severe utterances then would you have couple examples to get a better idea what you are actually referring to?

     
    #39     Aug 15, 2019
  10. luisHK

    luisHK

    https://www.ft.com/content/b1bd2aec-e333-11e8-8e70-5e22a430c1ad

    On the run now so not reading the article but it s supposed to be the same editor who first got his work visa renewal denied.
    Just giving a voice to protesters is becoming over the top in HK nowadays, more and more like in the Mainland
    Also 2 recent instances of Philippine officials involved in a complain vs Beijing in front of the UN, unrelated to HK, got arrested than deported upon trying to enter HK if i recall properly
     
    #40     Aug 15, 2019