Todd Wilemon has over 16 years of experience in the options industry. He has been with the NYSE Euronext for the last 3 years....
SHENZHEN, CHINA - NOVEMBER 28: The Shenzhen skyline, including The Shenzhen World Financial Center, illuminated by green lights, stretches in to the distance on November 28, 2010 in Shenzhen, China. According to the US Commercial Service, Shenzhen is one of the fastest growing cities in the world. Home of the Shenzhen Stock Exchange and the headquarters of numerous technology companies, the now bustling former fishing village is considered southern China's major financial centre. (Image credit: Getty Images via @daylife)
The second city in my travels in China was Shenzhen. It is located immediately north of Hong Kong, in fact, the city ends at the border with Hong Kong.
(When I was leaving China to come home, I was leaving from Hong Kong International Airport. It was just a short car ride from my hotel --though I did have to go through the border crossing and customs to get into Hong Kong. I had my passport stamped entering Hong Kong and an hour later at the airport it was stamped leaving Hong Kong.)
Shenzhen Stock Exchange is located here. While Shenzhen started out as a village and as recently as 1980 had a population of less than 400,000, it now has over 10 million residents. Shenzhen grew because it was the first and so far the most successful Special Economic Zone (SEZ.) This is where China first started transitioning to market –based economics…though the state still retains control.
Remember my comment regarding PhD’s in China? Small factoid, in a study from 2007, showed that over 20 percent of China’s PhD’s worked in Shenzhen. I met numerous PhD’s in both cities. China places enormous value on education.
I mentioned superstitions earlier…In the US, most hotels do not have a thirteenth floor…13 being an unlucky number. Well the same is true in China; they did not have a 13th floor in my hotel. They also did not have a 14th floor. The four in fourteen is verboten because it sounds like death! Can you guess the floor I was on? Fifteenth floor it was. Riding up in the elevator the first time, I noticed how the floor numbers jump from 12th to 15th floor. My hope was that bad luck and death didn’t notice the little subterfuge on the numbers. Obviously, everything turned out fine…but very amusing. You can say I am on the 15th floor even though I am just 13 stories up but am I really?
Investor Education is a major interest to the exchanges in China. Over 100 million security accounts are already open in China. Around 42% of these accounts are retail, representing about 80% of the trading volume. 91% of trades are entered via the internet. Currently, there are a number of educational safeguards in place. However, with the growth of new financial products such as options, Chinese exchanges understand the importance of continual education for its investor base in order to maintain safe and successful trading.
Can I mention the food? It was delicious and fresh with much variety. Every morning we would eat at the hotel buffet. It was like every buffet you would find here in the States but better. They had fresh green vegetables on the breakfast buffet (never seen that before,) roasted pumpkin one morning and roasted purple pumpkin the next morning…all were delicious. For my personal friends who are reading this and know me well, rest assured, the bacon was great.
China is a country on the move. It is moving full speed into the 21st century. As the country further embraces markets, capital will flow both into and out of the country. That is why OIC is so important. Our country attracts capital from all over the world and educated investors use options so it is best to start the education early. I have kept you long enough so I will end with this: Zaijian (Goodbye).
Trade ‘em up!