Options traders keep finding new reasons to get bullish on Chinese stocks.

First an acceleration in government spending sent the biggest Chinese exchange-traded fund in the United States to a three-year high in September. After that rally faded, [Company Incorporation USA]bulls turned their attention to the Shanghai-Hong Kong Stock Connect. When inflows as the link debuted last week proved disappointing, optimists were redeemed by China's surprise interest rates cut.

The result is that options traders are now the most bullish on record, sending the cost of three-month puts on the iShares China Large-Cap ETF to an all-time low relative to calls on Friday. JPMorgan Chase & Co, Barclays Plc and UBS AG said the People's Bank of China's first interest rates cut since 2012 will be followed by further reductions as policymakers act to shore up growth in the world's second-largest economy.

"There's a lot of interest in China globally," said Nader Naeimi, who helps manage about $125 billion as the head of dynamic asset allocation at AMP Capital Investors Ltd in Sydney.

"I expect to see more and more demand for Chinese shares. The momentum has turned around."

The Shanghai Composite Index is set to post a seventh straight monthly gain, the longest winning streak since 2009.

Deutsche Bank's X-trackers Harvest CSI 300 China A-Shares ETF jumped 5.1 percent in New York on Friday to the highest level since its US debut a year earlier. The iShares China Large-Cap ETF surged the most in nine months.

Puts protecting against a 10 percent slide in the iShares China Large-Cap ETF cost 0.3 points more than calls betting on a 10 percent rally on Friday, and the gap known as skew was 1.4 points on Monday, according to three-month data compiled by Bloomberg.

The most-owned option on the gauge was a $55 call expiring in January. That strike price was 37 percent above Monday's close.

ETFs are a better way for investors to bet on Chinese stocks than the Hong Kong-Shanghai bourse program that debuted last week, according to Pauline Dan, Hong Kong-based head of greater China equities at Pictet Asset Management Ltd.

The skew on the iShares fund has remained at least 40 percent below this year's average even as flows through the link stagnated.

China is counting on the new Hong Kong-Shanghai bourse link to help open up its capital account, [Hong Kong Company Registration Guide]boost local equity valuations and increase global use of the yuan.

Stocks fell in both cities as buyers left 76 percent of quotas unfilled in the first five days of the trading connect.