Reflections on a China Bet and a Tail Betting Experiment

[Green King]

I wrote this article to share and reflect on a bet I made on China back in 2024. Would love for everyone to check it out and let me know what you think. Reflections on a China trade — the thesis, the options, the loss, and what I got wrong about the world's second largest economy.
I am starting to write again. Tell me what you think. Feel free to ask me anything. 
Reflections on a China Bet and a Tail Betting Experiment
https://open.substack.com/pub/condensed/p/reflections-on-a-china-bet-and-a?r=7401s&utm_campaign=post-expanded-share&utm_medium=web

 

[SharperDingaan]

Hell of a difference between owning the beat-up underlying, and an option on the beat-up underlying. 

 

Own, and you need someone to buy you out at a higher price. The foreigner will always be at a disadvantage, is typically reliant upon an domestic 'approved' buyer, and will often have to pay that buyer a 'fee' for the liquidity window. More modest gain, divided over a much higher base cost, producing a lower return; hopefully worth the risks incurred.

 

Options rely on the exchange enforcing cash settlement, on the maturity date. Fewer disadvantages, leveraged modest gain, divided over a much lower base cost, producing a higher return; hopefully more and bigger wins that losses, rewarding for the risks incurred.

 

Quite a bit different though if you enter as a local when the foreign economy is sh1te, build during the trough, and sell when the economy is 'hot' again. Usually, the more that you look like a local, can speak the local languages, take the long view, and are culturally mindful (i.e. it's better that locals run the business) ... the better you will do. 

 

Hence, much harder to execute from the US than it would otherwise be from a Canada, Asia, etc.

Just not the american way.

 

SD