Strategic benefits spread to US stocks! Options traders are betting on the rise of Chinese concept stock ETFs.

After the announcement by the People's Bank of China of a large-scale economic stimulus package, options traders have increased their bets on a recovery in the Chinese stock market. On Tuesday, Asian stock markets soared after the People's Bank of China and other financial officials announced measures to boost the real estate industry and the overall economy. These gains extended to the US stock market, with exchange-traded funds (ETFs) tracking Chinese major stocks and internet stocks rising by over 8%, PDD Holdings Inc. Sponsored ADR Class A (PDD.US) rising by over 11%, and Alibaba Group Holding Limited Sponsored ADR (BABA.US) rising by nearly 8%. In the options market, the trading volume of bullish options for the $4.3 billion iShares China Large Cap ETF (FXI.US) surged to its highest level since February. The premium for a one-month contract betting on a 10% increase rather than a 10% decrease in value jumped to its highest level since 2015, after being significantly discounted in early August. In the largest trade of the day, an investor spent $6.75 million buying options that allow them to purchase 15 million shares at $33 per share before mid-November, betting on at least a further 12% increase. Investors are flocking to Chinese stock ETFs. Investors are also heavily buying call options on the Deutsche X-trackers Harvest CSI 300 China A-Shares ETF (ASHR.US) and PDD Holdings Inc. Sponsored ADR Class A ADR. Buying pressure has also spread to more broad-based emerging market funds. The trading volume for call options on the iShares MSCI Emerging Markets ETF (EEM.US) has surged to more than four times the normal levels, with investors mainly buying call options expiring in December with a strike price of $50, about 11% higher than the current price.