In 2025, the instruments supplied around US$11 million of vega — sensitivity to changes in the implied volatility of the underlying asset — per month, almost triple the level from 2024.
China’s policy pivot last year revived investors’ interest, with elevated volatility at the single-stock level and the artificial intelligence frenzy together leading to more demand for accumulation and equity-linked yield products, according to the note. Meanwhile, regulatory tightening and stricter investor protection standards in Japan and Korea helped curtail issuance in those markets.
“Volatility supply in Asia has shifted toward Hong Kong,” the strategists wrote, noting that Alibaba, Tencent, Meituan, Xiaomi Corp and BYD Co are the core underlying names for structured products issuance. “Dealers’ vega positioning across these stocks currently sits near peak exposure levels, suggesting large rallies or declines in spot prices could influence volatility flows.”
See also: Hong Kong economy grows most since 2021 as trade and IPOs surge
JPMorgan also noted that the growth in single-stock issuance has affected regional volatility dynamics, primarily boosting dispersion trades, where investors are long single-stock volatility and short index volatility.
The strategists expect the momentum to continue in 2026, with the top stocks offering liquidity depth, investor familiarity and exposure to key investment themes. Newer listings and recent index additions such as Contemporary Amperex Technology Co and Pop Mart International Group Ltd may “modestly broaden the base”, the strategists said.
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