Brazil -- great short opportunity coming soonI think come October, we will have another B wave top in brazil which can be shorted - as per my cycle analysis
EWZ trade ideas
THE WEEK AHEAD: PEP, COST EARNINGS; EWZ, CRON, NIO, IQ, MJPEP announces earnings on Tuesday before market open; COST, on Thursday, after. Neither presents a particularly compelling earnings announcement-related volatility contraction play, with PEP's rank/30-day implied coming in at 30/18, and COST's at 35/23.
With Brazilian elections taking place a week from today (October 7th), it seems to me that an EWZ play is in order if you haven't already got something on: the November 16th 29/39 short strangle is paying 1.59 at the mid with break evens around one standard deevy -- 27.41/40.59. You can naturally go with an October setup, but implied was over 20% higher out in November (44.0% versus 53.2%) as of Friday close, so you're likely to get a little more juice if you go a touch farther out in time.
On the exchange-traded fund side of things, EWZ comes in at the top of the board, with a rank/30-day implied at 79/50, followed by USO at 65/28, and GDX at 50/27.
Non-earnings high implied: CRON: 71/124; NIO: ~/106; MJ: ~/68.0, and IQ: -/61.4.*
Broad Market Majors Background 30-Day: QQQ: 17.2%; IWM: 15.0%; DIA: 13.6%; EFA: 13.3%; SPY: 11.8%.
* -- Neither NIO, MJ, nor IQ have been around for 52-weeks, so they don't currently have a 52-week range to evaluate. I would note that the options liquidity for MJ isn't the greatest, but figured I would throw it in there since weed is hot, and not everyone enjoys paying the single name roller coaster. The MJ November 16th 40 short straddle is paying a whopping 7.45 at the mid, with break evens at 32.55 and 47.45 ... .
Buy EWZLong-term buy EWZ on what may the the bottom of a emerging markets correction and Brazilian Elections volatility. On balance volume diverging upward. Stop just under major support at support at 30.00.
Trade of the Week IC in EWZEWZ still has high IV & IVR and looks to be finding some support at this level . Good value on a 31/26p 37/42 Iron Condor Selling for 2.36 cr max risk 2.64
Tasty stats POP 56% P50 62% Delta -1.95 theta 2.35
EWZ - BrazilSelling some high IV here with Brazil's elections.
-1 30/38 strangle in Nov cycle for $2.50 cr.
5th wave short - short term bearish - long term bullishI'm soing it with options so my spread is between 35 and 31. Sucking up that premium.
EWZ - BrazilThis is the subsequent roll from my last Brazil position.
-1 Oct19 31/41 strangle for $1.61.
Risk: 2x credit received
Profit: 50% cr received
B/Es are $29.39 and $42.61
Brazil is at make or break levelsWill either rocket downward after breaking resistance or rebound here. Fundamentally, this looks to be more negative based on what is happening in the world of currency.
Brazil is going down EWZ is going to test .618% of fibonacci for sure before the Presidential election of October 7.
Short idea (Brazil ETF)A break under 30.98 would be a new 2 year low. Leverage via $BZQ (2x bear ETF)
Quick bottom pick with optionsKeeping positive theta.
buying some call options to sell against it when the price rises
Brazilian hangoverBrazil looks like it will keep on dropping until the pools for the presidential election of October 18 gets a rational candidate. TGT could be circa 23.8.
EWZ - (Short Premium) Selling premium into high IVR $$$Short Strangle, 30 delta (31/38 strikes), 37 'DTE, $1.00 credit
EWZ - BrazilLooking for some high IV trades to enter into the mix here.
-1 Sep21 33/40 strangle for $1.34.
Risk: 2x credit received (worst case, take stock)
Target: 50% profit
Depending on how things go, I may keep rolling this position on in different ways, reacting to how the market moves.
EWZ - (Short Premium) Selling straddle into high IVRThere is no real clear price action direction, this chart has even room to run in both directions, and the 'IVR is high which makes it a good candidate for a short premium trade. I am selling a straddle as I can collect 10% of the underlying in premium in just 46 days.
Lava Jato en Brasil e impacto potencial en ArgentinaLas consecuencias del Lava Jato sobre el mercado de capitales de Brasil, bajando en cada condena de empresarios y festejando en las condenas a los miembros del PT. Pasará lo mismo en el reciente caso de corrupción argentino?
EWZ: Likely bottomed or bottoming here...Brazil is extremely washed out, but it has held a long term support level so far. I think odds are the market turns up from here.
I'm long $PBR in particular, since it is showing tremendous relative strength vs the brazilian market, and it has a long way to go to catch up to oil, closing the gigantic spread it now has. The situation with the CEO resigning caused further headwinds in the stock, but it has now stabilized and coiling against overhead supply...over time it will break above it following the earnings report most likely -as long as the fundamental story doesn't change and debt continues to be tackled effectively...-.
As for the $EWZ chart, we have hit a monthly low volume support, and also the lowest point of the last time they almost impeach Temer, this was a huge capitulation day for many investors and it is where most stocks bottomed back then. I'd look into finding interesting brazilian companies rather than buying the index directly, but it gives us a good reference point here. Another interesting chart is $EEM, and the Chinese stock market, both of which are also affected by the rally in the dollar that we had so far.
Best of luck,
Ivan Labrie.
UPDATE: Brazil (EWZ) up another 4% todayHi guys, thank you for the support! I will have this analysis out each weekend as well as daily updates throughout the week, if you guys like what I'm doing hit the "follow" button and you will get a notification each time I post a video or chart!
Have a great day everyone!
OPENING: EWZ AUG 17TH 34 SHORT STRADDLE... for a 2.44/contract credit.
Metrics:
Max Loss/Buying Power Effect: Undefined/6.94
Max Profit: 2.44
Break Evens: 31.56/36.44
Theta: 3.89
Delta: -14.41
Notes: Going where the volatility is at (again) in exchange-traded funds to sell a little August cycle premium while I wait for the September monthly to be more in that 45 days until expiration sweet spot. Recently, I've been taking profit in these short straddles fairly quickly (10% max) and then reselling at-the-money, but doing that here (and probably after this point) admittedly presents a marginal trade (10% max of 2.44 is .24).
UPDATE: Brazil up +2.74%, EWZ still looks higherHi guys, thank you for the support! I will have this analysis out each weekend as well as daily updates throughout the week, if you guys like what I'm doing hit the "follow" button and you will get a notification each time I post a video or chart!
Have a great day everyone!
OPENING: EWZ AUG 17TH 35 SHORT STRADDLE... for a 2.97/contract credit.
Metrics:
Max Loss/Buying Power Effect: Undefined/~$670/contract
Max Profit: $297/contract
Break Evens: 32.03/37.97
Theta: 3.15
Delta: 30.73 (Neutral to Bullish)
Notes: Here, I'm looking to emulate the delta of a naked 30 delta short put (paying ~.70/contract currently), but bringing in the beefier credit and extrinsic value of a short straddle. Looking to take this off for the lesser of 10% of buying power effect (~.67) or 25% of max (~.74).
