Global investors are increasingly using highly leveraged derivatives known as 'perpetual futures' or 'perps' to gain exposure to Chinese technology stocks, particularly amid the global surge in artificial intelligence interest [1]. These instruments allow traders to take long or short positions with significant leverage, often without owning the underlying shares, and have become popular as foreign investors face restrictions on direct participation in mainland Chinese IPOs [1].
Unitree, a Chinese humanoid developer, and CXMT, a memory chip producer, were notable targets for perp bets prior to their recent IPOs. Unitree's Shanghai debut saw its share price soar, driven by strong domestic demand, while CXMT's IPO was described as a blockbuster, with shares jumping 465% on debut and briefly surpassing Intel's market capitalization [1].
Market analysts highlight that the use of perps introduces additional risk, as these contracts are highly volatile and susceptible to rapid liquidations. A Hong Kong-based derivatives strategist noted that perps are one of the few avenues for global investors to access hot Chinese IPOs before the stocks become tradable on the open market [1]. Regulators have taken notice of the surge in perp trading volume, warning that the lack of transparency and high leverage can amplify market swings [1].
Technical analysts are monitoring key support and resistance levels for newly listed tech stocks, observing that price action in derivatives markets often precedes sharp moves in the underlying shares. For Unitree, resistance is near its post-IPO high, with support forming around the initial offering price. For CXMT, analysts urge caution after the dramatic debut rally, warning of increased volatility as the market digests the company's massive valuation jump [1].
The continued popularity of perps underscores both the appetite for exposure to Chinese tech and the speculative fervor surrounding AI-related stocks. As long as the sector remains in focus, market participants expect perp volumes to stay elevated, with traders closely watching price momentum, leverage ratios, and regulatory developments [1].
CONCLUSION
The surge in perpetual futures trading reflects strong global demand for exposure to Chinese tech IPOs like Unitree and CXMT, despite the associated risks and regulatory scrutiny. Market participants anticipate continued volatility and elevated perp volumes as the AI sector remains in the spotlight.