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RBS creates options strategy in trade on TAIEX

Date: 24 Nov 2009

The bank suspects Taiwan’s benchmark index could be range-bound in the next few months after a noticeable slowdown in the rate of its rise. The ground for a sell-off in volatility appears fertile.

Keywords (click to search): [Taiwan] [TAIEX] [Kevin Chang] [volatility] [options]

Pamela Tang
RBS suspects that Taiwan’s benchmark TAIEX index could stay range-bound in the next few months and has come up with a trading idea to sell index volatility via options.

The TAIEX closed at 7,714 points on November 24, having increased 68% since the start of the year. But notably, the rate of this rise has slowed to 8.5% since September.

Kevin Chang, head of equity derivative strategy for Asia at RBS in Hong Kong, says upward momentum may have lost steam and that the index could trade in a narrow band in the months ahead, or move...

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