Unusual options trading activity preceded a sharp sell-off in Futu Holdings and Up Fintech’s Tiger Brokers following a regulatory crackdown by China’s securities regulator.
Just a day before the China Securities Regulatory Commission announced penalties, put option volume on Futu surged to its highest level since October 2024. Tiger Brokers saw put volume spike to roughly 70,000 contracts - about eight times its normal daily average.
On May 22, the CSRC said it was penalizing Futu, Tiger Brokers, and Longbridge Securities for conducting unauthorized cross-border securities activities targeting mainland Chinese investors, ordering them to confiscate all illegal earnings.
Futu shares fell as much as 39%, to around $75. Tiger Brokers dropped up to 47%, hitting approximately $3.63 in early trading. CSRC’s penalty against Futu included a fine of approximately 1.85 billion yuan, roughly $271 million.
The crackdown follows a two-year regulatory pattern. The CSRC first flagged these companies for unlawful cross-border activities in December 2022, prohibiting them from onboarding new mainland Chinese clients. Both Futu and Tiger Brokers removed their apps from mainland China in 2023.
The fallout rippled beyond the three named firms, affecting other US-listed Chinese companies including Alibaba and Baidu.