Investors Hedge China ETFs, Tech Stocks Amid Geopolitical, Earnings Risks

Investors purchased significant put options on China-focused ETFs and major tech stocks last week, hedging against geopolitical tensions and potential earnings disappointment. The iShares China Large-Cap ETF (FXI) saw about 400,000 lots of March puts bought, alongside puts on the KWEB and ASHR ETFs. Analysts suggest the China hedges may preempt an escalation in U.S.-China tensions following criticism of U.S.-Taiwan trade talks. Concurrently, puts were bought on Nvidia, Oracle, and Broadcom ahead of earnings from Apple, Tesla, and Meta. Despite these hedges, the Cboe Volatility Index (VIX) saw only brief spikes, with strategists noting market desensitization to geopolitical events and a prevailing "buy the dip" mentality supporting equities.