Brazilian Stocks Outperform Nasdaq as Options Traders Increase Activity
Brazilian stocks have rebounded after a months-long decline, with the iShares MSCI Brazil ETF (EWZ) rising over 19% year-to-date and outpacing the Nasdaq-100's gain of 15%. The rally is attributed to surging commodity prices or optimism ahead of October’s general election. Options traders are increasingly active in EWZ, with options volume reaching more than six times its average on Wednesday. Options trading has been heavily skewed toward calls, with over 420,000 contracts traded and the top 20 contracts all being call options—a rare occurrence for a non-U.S. ETF. Implied volatility in EWZ has risen from 0.28 to 0.39, making options more expensive since late June as traders potentially seek strategies that benefit from reduced price swings.
Topics: Brazilian stocks commodities election optimism ETFs options trading