The Mystery Singapore Bull
The volume of trading in a stock is very important because it signals how many shares (not dollars) are moving hands. It’s a liquidity measure that gives investors useful perspective on sentiment, so note down the average volume just in case there’s a flare-up.
The spikes over time could alert you to buying and selling from insiders or controlling parties. If a big sale rocks markets, more shares are freed up for trading, which means it will be cheaper to trade going forward as bid-ask spreads close. There’s also less volatility!
The average volume of call-options traded for the MSCI Singapore exchange-traded fund (#EWS) is 222. Yesterday, it was a record 5,044 as one raging bull filled a massive order.
It’s a bullish bet, sure, but it’s freaking out some investors. There’s only one money manager responsible for this mega-trade, and no one knows who it is or what their thinking might be.
3,800 rarely chosen calls were purchased in odd lots with expiries in November, so it’s a huge cheer as far as Singapore is concerned. This exchange-traded fund mainly holds lenders (26%) and real estate (17%). It’s probably the lenders that lured in this big fish!
It’s convention for banks to steer clear of the far east’s wild west, Mainland China, which means setting up in Hong Kong or Singapore. These are both huge financial centers. However, Singapore is less of risk play right now given political tensions in Hong Kong, so dozens of offices are already on their way to relocate.
Hong Kongers are also enrolling in Singaporean schools, but the local stock exchange is still down 17% year-to-date. The Invstr community is 91% bullish on the index, and it will be interesting to see how that changes following this volume spike. Eyes peeled!
