China Stocks Take It On the Chin

China-based stocks are taking it on the chin today, including YOKU, SOHU, FENG, SINA, WB, and SFUN

Jul 6, 2015 at 3:35 PM
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Along with energy stocks and vehicles with Greek exposure, U.S.-listed China stocks are taking it on the chin today, despite a rally in Shanghai. The Direxion Daily China Bull 3x Shares ETF (YINN) -- which runs opposite the FTSE 100 -- is down 14% at $37.45, and a slew of ADRs are on the short-sale restricted list. Among them: Internet issues Youku Tudou Inc (ADR) (NYSE:YOKU), Sohu.com Inc (NASDAQ:SOHU), Phoenix New Media Ltd ADR (NYSE:FENG), and SINA Corp (NASDAQ:SINA), as well as social media stock Weibo Corp (ADR) (NASDAQ:WB) and real estate concern SouFun Holdings Ltd (NYSE:SFUN).

 

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All of the aforementioned stocks are on pace to end the day with double-digit percentage losses, with WB and SFUN both down more than 14%. Amid a recent sector sell-off, only YOKU and SINA remain in the black for 2015, with WB struggling to stay north of its year-to-date breakeven level today.

In the options pits, however, short-term traders remain more call-heavy than usual. The stocks' Schaeffer's put/call open interest ratios (SOIR) all sit in the bottom half of their annual ranges, suggesting calls outnumber puts by a greater margin than usual, comparing options expiring in three months or less. 

Meanwhile, with the exceptions of SINA and SFUN, short sellers have likely been taking profits on the Chinese names, with short interest dwindling during the past two reporting periods. Bearish bets on SINA and SFUN have increased 22.8% and 13.9% during the past reporting period, respectively, though shorts can't touch the plunging stocks today.

 


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