Inverse ETF Hong Kong Hedging Calculator
Size a Hong Kong inverse-ETF hedge for your long stock portfolio. Enter your portfolio value, beta, and the hedge ratio you want — get the exact number of inverse-ETF units (7300 / 7500 / 7552 / 7568) to buy, the cash cost, and your residual market exposure.
Key Takeaways
- • Hedge notional = portfolio value × beta × hedge ratio. Units to buy = hedge notional ÷ inverse-ETF price, rounded to the board lot.
- • HK inverse ETFs (CSOP 7300 / 7500 / 7552, Global X 7568) reset daily — they hedge a single down-day well but decay in sideways or choppy markets, so they are a short-term tactical hedge, not a buy-and-hold short.
- • A 60% hedge ratio on a HK$1M beta-1.0 book needs roughly HK$600K of inverse ETF and leaves HK$400K of residual long exposure.
Hedge Sizing Calculator
Your Long Book & Hedge Target
1.0 = moves with the index. A tech-heavy book may be 1.2–1.5.
Units to Buy
142,900
7300.HK
Hedge Cost
HK$600,480
incl. commission
Effective Hedge
60.0%
after lot rounding
Residual Long Exposure
HK$399,820
still unhedged
Decision Note
Buying 142,900 units of 7300.HK at HK$4.2 hedges about 60% of your beta-adjusted exposure (HK$1,000,000). It costs HK$600,480 of cash and still leaves HK$399,820 exposed to a market drop. Because this is a daily-reset product, expect roughly HK$1,801 of decay drag on a flat-but-choppy week — review the hedge every few trading days rather than setting and forgetting.
Hedge Payoff if the Index Falls
| Index Drop | Unhedged Loss | Hedge Gain (1-day) | Net Loss |
|---|---|---|---|
| −3% | −HK$30,000 | +HK$18,005 | −HK$11,995 |
| −5% | −HK$50,000 | +HK$30,009 | −HK$19,991 |
| −10% | −HK$100,000 | +HK$60,018 | −HK$39,982 |
| −15% | −HK$150,000 | +HK$90,027 | −HK$59,973 |
Single-trading-day approximation. Over multiple days the daily reset compounds and the realised hedge differs from these figures.
How the Hong Kong hedge ratio works
A hedge ratio is simply the share of your beta-adjusted market exposure you want to neutralise. A long-only Hong Kong stock book with HK$1,000,000 of value and a beta of 1.0 carries HK$1,000,000 of effective index exposure. If you only want to take HK$400,000 of downside off the table, that is a 60% hedge ratio against HK$600,000 of inverse-ETF notional.
Because Hong Kong stocks trade in board lots, the number of inverse-ETF units rounds to the nearest lot, so your effective hedge usually lands a fraction off your target. The calculator above shows that rounded figure and the residual exposure that stays unhedged.
For a tech-tilted book, matching the index matters: hedging a Hang Seng TECH–heavy portfolio with a broad HSI inverse ETF (7300) leaves basis risk, whereas the Hang Seng TECH inverse (7552) tracks it more tightly. Pick the inverse product whose underlying index best matches what you actually hold.
Hong Kong inverse ETF list
| Ticker | Name | Tracks |
|---|---|---|
| 7300.HK | CSOP HSI Daily (-1x) Inverse | Hang Seng Index |
| 7500.HK | CSOP HSCEI Daily (-1x) Inverse | Hang Seng China Enterprises Index (HSCEI) |
| 7552.HK | CSOP Hang Seng TECH Daily (-1x) Inverse | Hang Seng TECH Index |
| 7568.HK | Global X HSI Daily (-1x) Inverse | Hang Seng Index |
Daily reset decay — why this is a tactical hedge
A −1x inverse ETF aims to deliver the opposite of the index return for a single trading day, then resets. Over a straight one-day drop it works almost perfectly. But across a choppy sideways week — down 2%, up 2%, down 1% — the compounding of daily resets drags the inverse ETF below the simple inverse of the cumulative move. That is volatility decay, and it is the reason an inverse-ETF hedge is best used for days-to-weeks protection around a known risk event, not as a permanent short.
Frequently Asked Questions
How do I calculate how many inverse ETF units to buy to hedge my Hong Kong portfolio?+
Take your portfolio value, multiply by its beta to the Hang Seng Index, then multiply by the hedge ratio you want. That is the hedge notional. Divide by the inverse ETF price and round to the board lot to get units. For HK$1,000,000 at beta 1.0 with a 60% hedge and a HK$4.20 ETF price, that is HK$600,000 ÷ HK$4.20 ≈ 142,857 → 142,900 units at a 100-share lot.
Which Hong Kong inverse ETF should I use to hedge HSI vs Hang Seng TECH exposure?+
Match the inverse product to the index you actually hold. For broad Hang Seng Index exposure use CSOP 7300 or Global X 7568. For an H-share / China enterprises tilt use CSOP HSCEI inverse 7500. For a Hang Seng TECH–heavy book use CSOP 7552 so the hedge tracks your real holdings and minimises basis risk.
Can I hold a Hong Kong inverse ETF long term as portfolio insurance?+
Not ideally. HK inverse ETFs reset daily, so in sideways or choppy markets volatility decay erodes value even when the index ends flat. They are designed for short tactical hedges around a specific event — earnings, a rate decision, a known macro headline — typically held days to a few weeks, then closed. For permanent downside management, consider position sizing, covered-call income ETFs, or simply holding more cash.
What does residual exposure mean after I hedge?+
Residual exposure is the slice of your beta-adjusted market risk that is still unhedged after you buy the inverse ETF. A 60% hedge leaves 40% residual exposure — you still gain if the market rises and lose if it falls on that portion. The lot-rounding shown in the calculator can also nudge the effective hedge slightly above or below your target.
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This calculator provides position-sizing estimates for reference only and is not financial advice. Inverse ETFs are leveraged, reset daily, and can lose value over multi-day holding periods regardless of index direction. ETF prices shown are editable placeholders — always check the live quote before trading. moomoo and TradingView are affiliate links.