“The 30-day skew, the difference in volatility between a 10-percent out-of-the-money put and a 10-percent out-of-the-money call, is in the 95th percentile of its 52-week range, according to Trade Alert. The high skew points to the relatively strong demand for protection,”’ reports Reuters.
In previous weeks, though, local Chinese investors, who are notoriously short-term focused, added the recent volatility, piling into stocks on hopes that the sudden influx of foreign investors would fuel market gains. These types of market speculations are short lived.
The H-shares ETFs, or funds that track Chinese companies on the Hong Kong Stock Exchange, also show similar valuations. FXI has a 10.0 price-to-earnings ratio.
iShares China Large-Cap ETF
