Because these ETFs tend to own “ordinary” shares that are traded locally on exchanges in China, it is important that U.S. based ETF investors note that liquidity will likely be greater in the early morning (EST) U.S. market hours, and Chinese equity based ETFs will “widen out” to some degree after the Chinese local markets are closed.
This said, timing is an important part of the entire execution picture when adeptly trading these China based ETFs, as well as some data gathering intelligence in regards to where the overseas futures and equity markets may be during the “overnight” sessions.
In the options market, bearish put buyers appeared in FXI yesterday in notable size, and are either hedging long equity positions against further weakness or potentially outright speculating on further degradation in China.
iShares FTSE/Xinhua China 25
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