Hedging China EV-Makers Gets Pricey With Tariffs Looming

(Bloomberg) — Traders are preparing for more swings ahead for shares of Chinese electric-car makers as governments around the world plan new tariffs.

The cost of Li Auto Inc. options traded in Hong Kong is hovering around its highest level since February 2023 relative to the benchmark gauge of the city’s stocks. On BYD Co. Ltd., three-month implied volatility is elevated after hitting an almost one-year high versus the Hang Seng Index earlier in June, and Geely Automobile Holdings Ltd.’s is at one of its highest readings over the past year against the gauge, data compiled by Bloomberg show.