YINN: Levered Exposure To Chinese Equities

Macrotips Trading profile picture
Macrotips Trading
2.16K Followers

Summary

  • The YINN ETF provides 3x daily exposure to Chinese equities through the use of derivatives.
  • The bear case against Chinese equities is well known and consensus. Any improvement in the negative drivers can cause a large squeeze.
  • However, I think a rebound is best played with unlevered assets as the path could be volatile.

China stock market graph ticker

NanoStockk

I recently wrote a contrarian bullish article on the Templeton Dragon Fund (TDF) that highlighted the squeeze potential in Chinese equities.

While I am contrarian bullish on Chinese equities, I am hesitant to buy the Direxion Daily FTSE China

YINN ETF holdings

Figure 1 - YINN ETF holdings (direxion.com)

YINN ETF positive convexity

Figure 2 - YINN ETF positive convexity (Seeking Alpha)

YINN catastrophic losses

Figure 3 - YINN have seen catastrophic losses (direxion.com)

YINN price chart

Figure 4 - YINN price chart (stockcharts.com)

YINN suffers from volatility decay

Figure 5 - YINN suffers from volatility decay (Seeking Alpha)

This article was written by

Macrotips Trading profile picture
2.16K Followers
I spent 5 years as a co-founder and hedge fund CIO / manager. Before that, I was a hedge fund analyst/portfolio manager at a leading Canadian alternative asset manager. I write articles as part of my own due diligence on the stocks that I find interesting, for one reason or another.Follow me on twitter for my thoughts on macro trends.

Disclosure: I/we have a beneficial long position in the shares of TDF either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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