Huo Xing Finance reports that, according to publicly available options data and market information, prior to the China Securities Regulatory Commission’s announcement on May 22 of its intention to impose administrative penalties on Futu and Tiger Securities among other cross-border internet brokers, abnormal spikes in put option trading volume occurred for FUTU and TIGR on May 7, 19, and 21. The highest trading volume was recorded just before the official announcement; on May 21 at 09:57 Eastern Time, StreetInsider flagged unusual put option activity for FUTU and TIGR. ThetaOwl data also showed that the put/call volume ratio for Futu’s options expiring on May 22 was significantly elevated on May 21. Some market participants suggest these anomalies may indicate that capital had positioned itself in short positions ahead of the announcement, raising concerns of insider trading or front-running.
Abnormal put options activity observed before penalty announcement for FUTU and TIGR
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Summary
Abnormal options market activity for FUTU and TIGR was observed on May 7, 19, and 21, prior to the CSRC’s penalty announcement on May 22. Data from ThetaOwl and StreetInsider showed a sharp increase in put options, particularly on May 21, with a high put/call ratio for FUTU options expiring the following day. Some traders attributed these moves to pre-announcement positioning, raising concerns about possible insider trading or coordinated shorting. The fear and greed index for these stocks appears skewed toward fear, reflecting the unusual options activity.
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