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Comment by Magicstatic | Hacker News Reader

Serious question: How difficult is it to short the entire Shanghai Composite Index? Would it even be possible to place a trade?

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Good luck. The premium to borrow shares is very high right now.

And with the Chinese government saying they're going to support the market, I wouldn't want to be short.

I would buy put options instead of a naked short. I know it looks like an easy trade right now, but the Chinese govt. can be unpredictable. Even if you're right over a 6 month period, you can still blow up in the short term

Understood. Thank you

Yes, be careful. Just two months ago HN:ers were asking how to get in on Chinese stocks as they were going up 10% every day: https://news.ycombinator.com/item?id=9471858

You can buy $YANG ETF. FTSE China Bear 3X Shares

ASHR is the etf with the most liquidity.

Thank you for bringing this to my attention... second question: Why isn't everyone and their sister shorting the Asian market right now? Or are they?

Very, very low liquidity for foreigners. I don't even know what the rules are for nationals. Maybe some hedge funds are doing some otc stuff but otherwise there just aren't any serious options.

CHAD is a 1x inverse ETF that tracks the CSI 300 and has performed as expected in this environment. Note, if more and more people pile in to take advantage of the situation, it will almost certainly trade at a premium to NAV. This should not happen in an ETF to due the creation/redemption mechanism of ETFs, but the issuer is limiting creation units so it could trade like a closed end fund.

>Why isn't everyone and their sister shorting the Asian market right now?

Because every seller requires a buyer.

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