Check the supply schedule. Always.
That’s the first rule I teach every junior analyst. But today, I’m looking at a different kind of schedule: the options chain of a company that sells plastic figurines. Pop Mart. The name evokes images of blind boxes, hidden editions, and a generation of collectors who treat IP like a religion. And last week, the legendary value investor Duan Yongping made a move that the mainstream media misread as a sell signal. It wasn’t.
Let me cut through the noise. Duan didn’t sell a single share of Pop Mart. What he did was far more interesting: he sold call options and put options against his position. In plain English, he collected a monthly premium of roughly 5% by offering to buy more shares if the price drops (put selling) or to sell shares if the price moons (call selling). The market screamed “Duan is reducing exposure!” The reality is that he is using the market’s short-term anxiety to fund a long-term conviction. Yield is a tax on ignorance, and Duan just collected a 5% monthly tax from the ignorant.
I’ve seen this pattern before. In the 2020 DeFi summer, I watched farmers pile into protocols with unsustainable tokenomics, mistaking high APY for alpha. They ignored the structural fragility. Duan is doing the opposite: he is exploiting volatility to lower his cost basis on an asset he believes is structurally undervalued. The narrative around Pop Mart — that it’s a fading blind-box fad — is exactly the kind of surface-level story that forensic narrative hunters like me love to deconstruct.
Context: The Narrative Cycle of a Consumer Crypto
Pop Mart is not a blockchain company. But its business model shares deep structural similarities with crypto projects. Consider: it issues limited-edition “tokens” (blind boxes) with randomized rarity (like NFT mints). It builds a community around IP characters (Molly, SKULLPANDA, DIMOO) that function as brand-level “layer 1” ecosystems. Its secondary market (reselling, trading) creates liquidity and price discovery, exactly like an NFT marketplace. The only difference is that Pop Mart’s tokens are physical.
Duan Yongping is a value investor, not a crypto native. But his playbook mirrors that of a sophisticated crypto whale who understands that narrative cycles are longer than most traders realize. In 2021, when I was managing a fund during the NFT metaverse mania, I saw the same pattern: projects with strong IP and community survived the crash, while those with only hype evaporated. Pop Mart’s IP portfolio is its proof-of-stake. The question is whether the stake will suffer from slashing.
The context here is critical. Pop Mart’s stock has been volatile, down from highs, buffeted by macro headwinds and consumer sentiment fears. Duan’s options strategy reveals his view: the short-term uncertainty is real (hence the high premium), but the long-term brand moat is intact. He is effectively saying, “I am willing to be forced to buy more at a lower price, and I am willing to cap my upside at a higher price, because the premium I collect today is compensation for the risk I don’t actually believe will materialize.” That is a bet on narrative resilience.
Core: Narrative Mechanism and Sentiment Analysis
Let’s dissect the mechanics. Duan sold a covered call — meaning he promised to sell his shares at a strike price above current levels. If the stock surges, he misses out on upside beyond that strike. He also sold a cash-secured put — meaning he promised to buy more shares at a lower strike. If the stock crashes, he must buy more at that price. The premium (5% per month) is his reward for taking these obligations.
Now, run the numbers. A 5% monthly yield annualizes to roughly 60% — but that’s not risk-free. If the stock drops 20%, the put premium barely compensates. If it rises 30%, the call premium caps his gain. The strategy works only if the asset’s volatility is overpriced by the market. And that is precisely where the narrative disconnect lies.
The market is pricing Pop Mart as a high-risk consumer discretionary stock, subject to China’s weak recovery, youth unemployment, and fading trend cycles. But Duan sees something else: a platform that has evolved from a single-product company (blind boxes) into an IP ecosystem with offline parks, global expansion, and a deeply loyal collector base. He is betting that the market’s short-term narrative is wrong — that the “fad” is actually a secular shift in how young consumers allocate emotional spending.
I’ve seen this structural disconnect before. In 2022, when I pivoted my fund to modular chains like Celestia, the market was still obsessed with monolithic L1s. The narrative lagged reality by 12–18 months. Duan is playing the same game: he is using options to extract premium from the laggards who still see Pop Mart as a toy company, not an IP infrastructure play.
Code does not lie. People do. But in this case, the “code” is the options chain. The implied volatility is high, meaning the market expects big moves. Duan is selling that volatility. He is effectively saying, “The market is too scared. I’ll take the other side.” That is a classic contrarian trade — but with a twist. He is not short volatility through a pure vega play; he is using his existing long position as collateral. It’s a yield enhancement strategy that only works if the underlying asset’s narrative holds.
Let’s go deeper. The 5% monthly premium is a signal. In crypto options markets, a similar premium would indicate a token with high event risk — perhaps an upcoming unlock, a regulatory decision, or a major product launch. For Pop Mart, the event risk could be its quarterly earnings, a new IP launch, or a macro shock. Duan is betting that these events, while noisy, will not break the long-term thesis. He is collecting a tax on uncertainty.
Contrarian: The Blind Spot the Market Misses
Here’s the contrarian angle that most analysts overlook: Duan’s strategy is not a sign of bullish conviction — it’s a sign of structural indifference to short-term price. He doesn’t care if the stock goes up or down, as long as it stays within a range. That range is his comfort zone. If the stock crashes below his put strike, he will be forced to buy more at a lower price — effectively averaging down. If it moons above his call strike, he will be forced to sell some shares, capping his profit. Either way, he wins on premium.
But what if the narrative decays? What if Pop Mart’s IP portfolio becomes stale, and the new characters fail to resonate? Then the stock could drift lower over time, and the premium collected will not offset the capital loss. That is the real risk — not volatility, but narrative decay. Duan is betting that Pop Mart’s IP has a long half-life, similar to how established crypto protocols (like Ethereum) maintain value even during bear markets. But IP is not code. Code can be forked; IP can be copied or forgotten.
The market’s blind spot is that it treats Pop Mart as a fashion trend — something that will fade as the next generation’s tastes change. But Duan’s bet implies that the company has built a moat around its characters, much like Disney has with Mickey Mouse. The difference is that Disney has a century of history. Pop Mart has a decade. The narrative is still being written.
Takeaway: The Next Narrative Signal
So, what does this mean for the next 12–18 months? Watch the options chain. If the implied volatility declines — meaning the premium shrinks — Duan may adjust or unwind his positions. That would signal that he believes the short-term uncertainty has resolved, potentially paving the way for a re-rating. If the premium stays high, it means the market remains fearful, and Duan will continue collecting yield.
But the real signal is elsewhere. Look at Pop Mart’s IP pipeline. Are new characters gaining traction? Is overseas revenue accelerating? These are the fundamental catalysts that will determine whether Duan’s strategy is genius or folly. If the narrative strengthens, his options will be exercised against him, and he will miss some upside — but his overall return will still be positive due to the accumulated premium. If the narrative weakens, his puts will force him to buy more of a declining asset. That is the asymmetric bet he is making.
In crypto, we call this a “basis trade.” In traditional finance, it’s called a covered call with a put overlay. But no matter the label, the underlying truth is the same: Yield is a tax on ignorance. Duan is collecting that tax from traders who are too focused on short-term price action to see the long-term narrative structure. He is playing the role of the casino, not the gambler.
Check the supply schedule. Always. But also check the options chain. It tells you what the market is afraid of — and what the smart money is willing to profit from.
