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I was thinking that PGJ, FXI, or GXC could be sold short 100 shares to short the Chinese market and you'd buy 1 call option contract to hedge against any negative upside. For one with not much capital, I like PGJ the best.
I also like considering to short the Italian market by shorting EWI and buying a call option to hedge upside risk.
EWI looks to be the best that I see off your list. I just don't see the set-up. I think one could also consider SDS should we drop more in the S&P this guy might offer an entry off the next bounce in the S&P500. It does a fairly good job in mirroring the inverse effect.. Despite the Bearish action over the last few days I plan on waiting for more confirmation to see what side to get on. It has not been easy shorting as of late and this is not to say now will be the same but I'll wait for now...
CAF may be the best. FXI is not a good candidate. It invests in H shares, which are correlated but not directly related to A shares on the mainland market.
Thanks FirstConsul for clearing that up; we don't want anyone buying H or A shares.
Do you like to sky dive? If not, this play is not for you; it's way too risky. I'm bullish on Taiwan, but bearish on China. I'm bullish on Europe, ex-Italy. These are some hypothetical ideas.
Long EWT 15%
Short CAF (China) 15%
Short EWI 12.5%
Short EWG 12.5%
Call Hedge on CAF or PUT on CAF (no short)
Call Hedge on EWI or PUT on EWI (no short)
Call Hedge on EWI or PUT on EWG (no short)
I like to see a massive run-up (above market, very bullish return) before I would short a market. I personally don't short stocks (disclaimer).
The remaining 125% of the portfolio
Long EFA 25%
Long EWC 25%
Long EWJ 15%
Long VTI 15%
Long VBK/VBR 15%
Long VO 15%
Long PZI 15%
I consider China and Taiwan to be far removed from each other (similar to the US and Mexico not US and Canada).
For one with not much capital, I like PGJ the best.
Linear Mode
