There are a few reasons why I think there will be a big swing in price tomorrow for the Chinese stock market. In short:
-The 2% that the Chinese ETF is up today is completely fabricated, as the market has been closed the past 3 days due to Chinese New Year
-Overall recent global market volatility
-The Japanese market is down almost 8% in the past 2 days
-At today’s Fed meeting, Yellen basically said the American economy is fine and there will be subsequent interest rate hikes going forward. No mention of another QE or negative interest rate policy.
So, I am going to do a short term trade similar to the options spread before for Tyson Foods.
I am buying Feb 19, 2016 $29 calls and Feb 19, 2016 $29 puts on the iShares China Large-Cap ETF at the market.
Right now, the calls are about $0.95 and the puts are about $0.61, but official prices will be in the trade log and portfolio. There are no stop losses on this trade since the two positions offset each other.
Trading Through Trends 