You could do it but I think it would be expensive. A Jan '25 EWT put at 41.81 (just under the current stock price) would cost $764 on IB right now, with a breakeven of $34 (~20% drop). If EWT drops 30%, you make $522. You’d be spending a lot of money for not a lot of hedging.
I’m also pretty curious what happens to EWT options if the Taiwanese stock market stops functioning. I mean, sure, EWT is traded on the NYSE, but I feel like there might be some kind of contingency in place.
What did you end up doing? I have a property in bakersfield that I’m looking to do the same with. Need advice
If you have a mortgage and have most of your money in a stable currency like USD / SGD / GBP, and an invasion happens, TWD currency value will likely tank, which enables you to pay off the mortgage for next to nothing.
If invasion happens USD will likely tank too, from all the sanctions that would inevitably happen as well as huge disruption to the global supply chain.
There’s a very specific market for this on Polymarket. $2M USD liquidity.
This has aged well. Property prices in HK are plummeting.
Sure TL sure. Incase you havent noticed the US$ surged under the the supply chain shortage.
Yet they are still much higher.
The takeover was in 1997. China has been slowly letting mainlanders into HK since then.
Property prices have trended downward since the all-time high in September 2021, dropped by 24.2% as the interest rate hike cycle began in mid-2022
Yeah since the all time high.
But the prices still remain high.
Yet still falling. Might drop 50%
It might, it might not. But the prices still remain triple what they were 20 years ago.
I read something interesting last week that talked about how the S&P 500 might be affected by an invasion of Taiwan. Obviously war in itself would likely affect most stocks as investors move money to safer assets, but the article that I read focused more on how the companies that make up the S&P 500 might actually be affected. Since the S&P 500 is roughly made up of 33% tech, and 9% communication services, it would be interesting to see or know how exactly these companies would do if they did not have access to Taiwan’s chips and other components that the world is reliant on Taiwan for. It further raises the question of, would someone who is already over-reliant on Taiwan e.g. working in Taiwan and owning Taiwan property be better investing in a non-technology S&P 500 fund such as SPXT so that they can limit how much their assets get f***ed during a war?
Well that would be true pretty much anywhere. My place is worth more than 10x what I paid for it 10 years ago.
So my point still stands. If we have to have a transfer of sovereignty, might as well rob the mainlanders blind on our way out when the communists inevitably start boating them in to drown out the locals and cause a supply shortage.
Now, along with interest rate increases, those people seem to be cashing out and getting outta there.
Don’t forget it won’t just be Taiwan but these wars may escalate, if the us does nothing then freedom of the seas go out the door, if china handles this badly it can escalate into a global war.
Meaning the only real way to hedge against this is gold, physically secured in your house.
Until it gets blown up.
It’s basically impossible to know how it will go, and how society will be reorganized. Meaning there’s no real way to hedge against this. If china decides they want to gobble up the entire eastern Pacific, not much can be done.
lmao they can’t even gobble Taiwan.
Not in your house in Taiwan. You’d be better having gold in a secure location or safety deposit box in a different country.