Don here...
China reached a trade agreement with the EU today.
Chinese internet stocks exploded. Brandon Chapman caught the move in real time and found institutional money piling into calls.
KWEB, the Chinese internet ETF, surged 5%. Alibaba ripped 10% higher. This isn't retail speculation. Brandon tracked block trades showing thousands of contracts bought in single prints.
The catalyst is clear. China produces 70% of the world's electric vehicles. The EU deal establishes minimum pricing guidelines that open European markets to Chinese exports. Money is betting this is just the beginning.
Brandon's block trade scanner revealed the positioning:
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FXI saw 15,000 call contracts bought in a single print at the 16 delta strike, with hundreds more following.
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KWEB recorded 2,700 call contracts bought at the 37.50 strike in one trade.
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ASHR showed 28,000 puts bought, but at far out-of-the-money strikes suggesting hedging rather than conviction.
The options flow tells the story. FXI and KWEB are seeing aggressive call buying at strikes close to current prices. That's directional conviction.
Brandon outlined a simple spread structure for KWEB. Buy the 38 strike, sell the 40. If KWEB pushes toward 40 over the next 40 days, you're looking at roughly 70% gains on the spread.
Click here to watch Brandon break down the block trades and the exact strike prices he's watching
To your success,
Don Kaufman
Chief Market Strategist, TheoTRADE
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