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EWZ

THE WEEK AHEAD -- "LESS THAN SEXY" FOR PREMIUM SELLINGWith the VIX finishing the week out at 16.66, next week is setting itself up to be a less than sexy week for premium selling, particularly in broader market instruments like SPY, IWM, QQQ, and DIA. Moving to other sectors, the Brazil ETF, EWZ continues to be hot premium selling wise, with an implied volatility rank of 72. A couple of issues in the oil and gas space follow closely behind in the 70+ club (UNG (implied vol rank 72); RIG (71)); with several gold plays remaining in the 60s (GDXJ, GDX, GG). From there, volatility in individual underlyings and/or ETF's slips off somewhat dramatically, with only a few in the 50-60 range (X at 57; ORCL, 57 (one of this season's last earnings plays); CAT, 55 (earnings afterglo vol); and GLD, 52; with the remainder of most highly liquid, options playable issues slipping below 50 thereafter. Given the fact that I'm in a gold play, in EWZ, and have exposure to oil, I don't see myself putting on a heckuvalot of new trades next week. That's not all bad; these little volatility lulls make for a good time to do housekeeping on the various messes I created during the last volatility wave, clean up the earnings plays that didn't work out this past season, and/or dry out powder for the next volatility spike or whatever comes next ... . Naturally, should VIX spike to plus 25, I'll be right back in it with some new plays to take advantage of that. In the meantime, a cleaning of my trading "garage"/"basement"/"backyard" is overdue. It ain't sexy, but it's gotta be done some time.
CBOE:VIX
by NaughtyPines
EWZ -- APRIL 15TH 18.5/22/22/25.5 IRON FLYWith volatility ebbing out of the broader markets and earnings season, for all practical purposes, over, I'm looking to put on some small, defined risk, premium selling plays in April while the remainder of my March setups work themselves out. With an implied volatility rank at 60 and an implied volatility of 48, EWZ isn't the greatest play in the world for premium selling, but it is an ETF. They're less volatile than individual underlyings as a general matter, so I lower my premium selling standards accordingly. There are a couple of different ways that you can look at an iron fly: (1) it's a defined risk short straddle; or (2) it's a really tight iron condor. I tend to treat them as "defined risk short straddles," because I manage short straddles differently from short strangles (an iron condor is basically a defined risk short strangle). With short strangles and iron condors, I look to take the whole trade off as a unit at 50% max profit. Short strangles and iron flies are a different story. If you look at the metrics for this particular trade, the break evens are quite tight: 19.92 and 24.08 -- much tighter than they would be for a short strangle or iron condor setup, and there is virtual certainty that one side or the other will be tested sometime during the trade since the short options are basically at or near current price. As with all premium selling plays, though, you're looking for volatility to contract rolling into expiry, and you can profit from this circumstance even when -- with iron flies or short straddles -- price has broken one of the short strikes of your setup (but not the long side). As always, there are trade offs with the setup: max profit is a 2.08 credit ($208/contract; BPE $142/contract). I couldn't get near that much credit if I went with a standard iron condor (an April 15 15.5/18.5/25.5/28.5 iron condor will rake in a whopping .41 in credit at the expense of a BPE of $259/contract). Because of this trade off and the fact that the probability of profit for an iron fly is basically a coin flip as compared to the iron condor's 70-75% probability of profit, I'll look to take this setup off at 25% max profit instead of the usual 50%. Naturally, this isn't my preferred way of doing things. However, with underlyings below $50/share, you generally cannot take in enough premium if you're going with a defined risk arrangement to make it worthwhile unless you tighten your iron condor or go the "defined risk short straddle" or iron fly.
AMEX:EWZ
by NaughtyPines
6
Long call trade: EWZ - Yacine Kanoun inspiredYacine Kanoun brought this stock to my attention. I'm considering purchasing calls with a strike price of 40usd and an expiration date on March 6th. The spread between USDBRL and EWZ is reaching similar percentages to what has show in the past, so I think that it's due for an adjustment, and thus agree with Yacine. I also spotted a technical key level, which I want to see the stock avoid to retest during the next week, for a time at mode buy setup to confirm. My own indicator displaying bands shows price reached an extreme low, and so does rgmov. The retest of the supply area seen in the last high, but on lower volume is a bullish signal as well. Remember to risk less than 5% on each trade, in this case, I'm considering a 1.5-3% risk. Good luck!
AMEX:EWZLong
by IvanLabrie
10
Premature enormous potential in Brazil Will be monitoring $EWZ over the next few weeks to see if this 3.5 year shit show is turning a new leaf with the recent break of a major downtrend line (2 variations drawn) on a positive divergence in RSI, and a slowly uptrending MACD that crossed the zero line and is at levels not seen since early 2012. The downtrend line of momentum on a weekly relative basis vs. the S&P has also been captured while putting in a higher low. While things are definitely looking interesting, I would want to see the downtrend line from early 2008 as well as the 200 day moving average captured before going long.
AMEX:EWZ
by Nick_C_
World Cup's Winning Trade On Brazil's EWZ Millions of soccer fans around the world await the most important global sporting event, the 2014 FIFA World Cup. Many media outlets have already started to hype different stocks, as well as statistics about the event. This brings about a question for us traders, who is going to win and how can we profit? As technical traders, who study and trade from the charts, we are one step ahead of the news, and possibly even the game! With that in mind, lets look to the iShares MSCI Brazil Index (ETF) (NYSEARCA:EWZ) to help us pick the winning nation by analyzing the chart. We can clearly see the iShares MSCI Brazil Index (ETF)(NYSEARCA:EWZ) is retesting a major trendline break out, with the 200 day moving average just below the trendline. This could serve as minor short term support. However, the chart has begun to consolidate right at the line, without getting any significant bounce, as of now. The longer price remains around this level, the more likely the iShares MSCI Brazil Index (ETF) (NYSEARCA:EWZ) are to break down. If this trendline is broken the iShares MSCI Brazil Index (ETF)(NYSEARCA:EWZ) will fall quickly. A major support level where the shares will find buyers is $42.49. If the level mentioned ($42.49) happens to be hit towards the end of the World Cup, and Brazil is still in the tournament, then the EWZ will rally (among other factors) in part as a result of Brazil winning the 2014 FIFA World Cup from this level of support. That is my prediction based on the charts... please feel free to comment and make your own predictions, let us know if another chart is telling you who will win the 2014 FIFA World Cup! I would love to hear your thoughts, feel free to comment on our google+ page, our facebook fan page or tweet at me. As always, myself and the other Pro Traders of the Elite Round Table will be providing our members with the detailed trades, live when they happen... join us now! Kiliam Lopez Elite Round Table, Pro Trader Tweet at me @kiliamLopez
AMEX:EWZ
by KiliamL