The iShares MSCI Brazil Capped ETF seeks to track the investment results of an index composed of Brazilian equities.
There has been heavy call side activity in the EWZ even as oil re-tests levels last seen in Spring 2016. Considering 7 out of the 10 top holdings in the EWZ are tied to the energy and financial sectors, a good way to possibly exploit the outperformance in the EWZ is to remain long EWZ and the expense of the underperforming ILF, go long oil and short the EWZ, or a combination of both using a tier system With volatility so cheap, its pays to set a number of arbitrage trades in some of the best and underperforming sectors. That premium gap is likely what pays at the next turn of the cycle.
EWZ rejected $35 three times already. May be worth the shot on a re-test of TL support, but even so, I'd only be a buyer on a trade down to $27 - $29. With volatility finally at levels were its worth selling back dated options, owning the underlying and selling calls makes the most amount of sense.
