Since January, Pop Mart’s stock has skyrocketed more than 200%, driven by IP mania (think Labubu and Molly) and massive FOMO. These cute figurines have become the "spiritual opioids" of China’s Gen Z. Resellers, scalpers, and livestreamers have all piled in. Even Chinese social media feeds are flooded with Labubu photos. $POP MART(09992)$
But things started cooling off on June 18, when Pop Mart restocked its red-hot Labubu 3.0 series. The secondhand price for a box of blind boxes (6 units) quickly collapsed from ¥1100–1500 to ¥600–900. Pop Mart’s stock followed suit, dropping 9% in two days, and over 11% on the week.
Can Pop Mart keep going up? And if you’re bearish—how can you short it?
Option 1: Shorting the Stock Directly
The most straightforward way to bet against Pop Mart is through short selling.
That means borrowing shares from your broker and selling them on the open market. If the stock drops, you buy them back cheaper and return them—pocketing the difference.
Let’s say you short 100 shares at HK$200, and later buy them back at HK$100. Your profit? (200 - 100) × 100 = HK$10,000. But if it goes up to HK$300? You’d be down HK$10,000.
The idea is simple. But in practice, shorting Pop Mart is painfully expensive.
First, there’s a 50% margin requirement. Want to short HK$10,000 worth? You need to post at least HK$5,000 in cash collateral.
Then comes the borrowing rate—which is 100% annualized. Even if the stock goes sideways, you’d lose money just paying interest.
And don’t forget the volatility risk. Pop Mart can swing 10%+ in a day. If the stock spikes, your broker might margin call or forcibly close your position, locking in losses.
To sum it up: shorting is high risk, high reward. It gives you full upside on a drop, but with massive cost and risk. Great for pros with tight risk control—not for casual traders.
Option 2: Buying Put Warrants (Puts)
If you don’t want to short the actual stock, there’s another way unique to Hong Kong markets: warrants—aka “structured products” similar to options.
For example, you can buy a put warrant on Pop Mart. These work similarly to put options in the U.S.: you profit when the stock price drops, and you get leverage with limited upfront capital (a few hundred HKD can get you started).
The advantages?
Low cost, no need to borrow shares
No margin calls or interest charges
Clear max loss (what you paid for the warrant)
But the drawbacks are real too:
Short expiry periods (often 1–6 months)
Time decay eats into value daily
High sensitivity to implied volatility
If you time it right, a 5% drop in the stock could mean a 20%–100% gain on the warrant. But if you’re too early or the stock stalls, it bleeds value fast.Warrants are best used for short-term tactical bets, not long-term convictions.
Short carefully. Trade smart.
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