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closed Positions

ewz: 05.13.20 – 05.15.20

ETF | Brazilian Equities | Status: Closed

Opening Trade

05.13.20
The market has had a decent
spike over the past couple days... The
went from around 27 to 35, which means option prices have risen significantly. EWZ has declined but, relative to the rest of the market over the past couple days, remained fairly strong in my opinion. It's been completely decimated since the meltdown first began a couple months ago, which has only been exacerbated by plummeting oil prices. Perhaps its latest "strength" is only because it's already hit rock bottom. The selloff could certainly continue, but I've decided to establish a
position by
an
I was able to collect $1.08 for my trade.
The
in this
is quite high for such a low-priced underlying, but this is due to its extreme volatility. With my
at $18.92 the most I can lose on this position is $1,892 – but that's if EWZ drops to zero... Possible, but highly unlikely. As you can see by looking at the
in the chart below, there is currently only a 10% chance EWZ
below $16 (which would be a $292 loss if I chose not to defend). I've been battling this underlying for quite some time, and my bullish bias is a remnant of my previous position (which I just closed yesterday). Getting back in today, I was able to establish a far more favorable scenario than I previously was in. I have an extra $1 of room between my put and the current share price, and nearly the same amount of
as my previous position.
I plan to take this position off if I can achieve 50% of the max potential, which would leave me with around $0.54. If EWZ does continue to plummet, I am hoping to convert this position into a
scenario. My plan at the moment is to let this trade be until the put is nearly all
, in which case I will either replace it with shares and an
or simply sell a
with the
at my put
to replicate shares. We'll see if and when the time comes.

Risk Profile:

Figure 1

Strategy: Short JUN 19 20 Put

sto 1 jun 19 20 put
Fill Price: $1.08 credit

Position Analysis

U/L Price: $21.93
IV: 68.6%
IVR: 54.4
Liquidity: 4/4
Position: Short JUN 19 20 Put
POP: 70%
Cost Basis: $1.08
Risk: Undefined
BPR: $250
Max Profit: $1.08
Max Loss: $18.92
Target P/L: $0.54
Break Even(s): $18.92
Extrinsic Value: $108.00
Net Delta: 30.14
Net Theta: 2.274

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