Q1 of 2016 was the worst quarter for hedge funds in at least seven years, but hedge funds dedicated to the Chinese market are having a particularly tough go of it.

According to Bloomberg’s Christopher Langner, shorting stocks in China can be a difficult proposition these days. Shorting mainland China stocks has become extremely limited and expensive. In the United States, that problem could be easily remedied by turning to the derivatives and futures markets, but there is no options market for individual Chinese stocks and only one index-option contract available. Futures are very limited as well.

Chinese regulators aren’t doing hedge funds any favors either. Last August, a new rule was implemented in China requiring short sellers to wait 24 hours to cover their positions. In addition, Beijing has also made new rules limiting the trading of stock-index futures.

With very few viable ways to go short Chinese stocks, Chinese hedge funds are finding it difficult to hedge.

To make matters worse, competition among Chinese hedge funds has…

Click here to continue reading

Want to learn more about how to profit off the stock market? Or maybe you just want to be able to look sophisticated in front of your coworkers when they ask you what you are reading on your Kindle, and you’d prefer to tell them “Oh, I’m just reading a book about stock market analysis,” rather than the usual “Oh, I’m just looking at pics of my ex-girlfriend on Facebook.” For these reasons and more, check out my book, Beating Wall Street with Common Sense. I don’t have a degree in finance; I have a degree in neuroscience. You don’t have to predict what stocks will do if you can predict what traders will do and be one step ahead of them. I made a 400% return in the stock market over five years using only basic principles of psychology and common sense. Beating Wall Street with Common Sense is now available on Amazon, and tradingcommonsense.com is always available on your local internet!