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CSOP’s US large oil & gas companies leverage and inverse products to list on HKEX


CSOP US Large Oil & Gas Companies Daily (2x) Leveraged Product (7204.HK) and CSOP US Large Oil & Gas Companies Daily (-2X) Inverse Product (7505.HK) are now listed on the Hong Kong Stock Exchange.

The firm writes that aiming to help investors capture short-term investment opportunities brought by the high volatility of oil & gas companies, 7204.HK and 7505.HK provide investment results closely corresponding to leveraged (2x) daily performance & inverse (-2x) daily performance of Solactive US Large Oil & Gas Companies Index NTR (the “Index”) respectively. With a listing price at around HKD 7.75 per unit of 7204.HK and 7505.HK, trading lots of 100 and a management fee of 1.60 per cent, 7204.HK and 7505.HK have received USD5 million and USD5 million initial investment, the firm says.

CSOP writes that oil & gas companies’ performances are highly correlated with oil & gas prices and volumes, which are determined by various factors, making oil & gas company stocks one of the most volatile sectors. US oil & gas companies are cyclical, therefore benefiting from the increasing economic activities which push up demand and prices of oil & gas. In addition, political and weather uncertainties affect oil & gas companies’ business. Trading opportunities emerge from the high short-term volatilities of US oil & gas stocks, the firm says. As a result, the average daily turnover (ADT) of US oil & gas equity L&I products grew at CAGR of 22 per cent in 2015-20221.

Recent market concerns over energy shortage caused by geopolitical tensions in Ukraine fuel the oil & gas sector performance. Solactive US Large Oil & Gas Companies Index NTR, closely tracking the top 15 oil & gas companies listed on any stock exchange in the US with free float market capitalisation greater or equal to USD200 million gained 42.37 per cent year-to-date.

Since the first Leveraged & Inversed (“L&I”) product listed in 2016, Hong Kong’s L&I market has seen a continuous growth to HKD14.39 billion in size & HKD2.54 billion of average daily turnover as at the end of October, 20223. Dominating Hong Kong’s L&I market, CSOP writes that it has demonstrated a remarkable track record with credibility and success by having introduced 17 L&I products in Hong Kong, contributing more than 90 per cent AUM and ADT to Hong Kong’s L&I market4.

Ding Chen, CEO of CSOP says: “On top of our achievement, we are on a mission to bring more excellent L&I products to our investors, further promoting the prosperity and development of Hong Kong’s L&I market. I believe this pair of oil & gas leveraged and inverse products will be excellent trading tools that can help investors take advantage of US oil & gas sector amid the volatile market.”

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