Opening (IRA): EWW March 21st 46 Covered Call... for a 45.00 debit.
Comments: Taking a small (ish) directional shot in the Mexico exchange-traded fund, selling the -75 delta call against shares to emulate the delta metrics of a 25 delta short put, but with the built-in defense of the short call.
Metrics:
Buying Power Effect/Break Even: 45.00/share
Max Profit: 1.00
ROC at Max: 2.22%
50% Max: .50
ROC at 50% Max: 1.11%
Will generally look to take profit at 50% max, add at intervals, and/or roll out the short call if my take profit isn't hit.
EWW trade ideas
EWW - Another Long-Term ViewThe new president tauted her first 100 days in office mexiconewsdaily.com yet the stock remains in a downtrend. On a chart pattern look, it appears that we are in the midst of a larger-term Right shoulder of a massive head and shoulders formation.
The shorter-term formation also appears to be a head and shoulders formation with the neckline coming in just below 44. From there, it could pattern out the right shoulder before dropping again below 30.
Trump hasn't even taken office yet and Mexico is feeling the pain. While things might turn around, it's hard to feel positive in a socialist political environment. Should interest rates in the US continue to rise, negatively affecting US stocks, EWW tumbling down to the $30 level wouldn't be too much of a surprise.
EWW - Betting on the ElectionWhile election betting sites are coming into the spotlight these days, another way to bet on the upcoming election is through betting on the Mexican economy. Anecdotal evidence indicates that China and even US manufacturing giants are set to build more plants in Mexico should the Harris team win. Trump on the other hand, promises tariffs on items manufactured abroad.
Also noted is the multitudes of immigrants waiting at the Guatemalan border to head to the US should Harris and Democrat border policies prevail. Mexico would be smart in capturing those qualified to add to Mexico's potential manufacturing powerhouse should the political chips fall their way.
Another factor to consider long term is the demographic cliff that the US is on, and Latin America isn't. Mexico certainly is in a strong position to develop into an economic powerhouse of the future, with appropriate leadership.
Opened (IRA): EWW Oct 18th 50 Monied Covered Call... for a 49.02 debit.
Comments: Selling the -75 call against stock to emulate the delta metrics of a 25 delta short put, but with the built-in defense of the short call. The IV isn't fantastic here at 29.8%, but the ROC is kind of what I'm minimally looking for out of this sort of play, so putting on a small position here, particularly since the underlying isn't all that far off its 52-week low.
Metrics:
Buying Power Effect/Break Even: 49.02
Max Profit: .98
ROC at Max: 2.0%
50% Max: .49
ROC at 50% max: 1.0%
Generally, will look to take profit at 50% max, roll short call for duration and credit on side test.
Idea - EWW, Feb 13 (short)As detailed on the chart, the trend has continued for some time, however price action may go back to the downside and move in our favor. If you entered on Feb 6th with the original cross signal, you'd still be waiting for the trade to do its thing; waiting to enter now basically gave us a pullback in our favor.
Not sure I'd enter a position short here, but the setup looks interesting.
CPI data comes out in a few days, and EWW is strongly correlated to the broader US market .
Will Mexico benefit from de-China shift? not yet says $EWWEWW should benefit from the shift toward Latin American countries and away from China. US manufacturers may be looking to bring manufacturing closer to home with geo political risks escalating this year. Higher shipping costs make Mexico an obvious candidate to consider. However, price action in EWW etf, as well as many other equity funds, are showing that the bull run over 1-2 years is running out of steam for now.
Mexico failed breakoutAn interesting way to see how countries are doing is by the iShares of the country.
Mexico had seen a breakout, but very quickly gave that up, creating a failed breakout.
Next support & resistance levels are drawn in the chart.
50sma and 200sma look like they will start trading together.
Mortality rate there is the highest in the world unfortunately.
OPENING: EWW SEPTEMBER 18TH 32/33 SKINNY SHORT STRANGLE... for a 2.44/contract credit.
Notes: With price trading in between the 32 and 33 strikes, went skinny short strangle in lieu of short straddle. Since it's almost a straddle, I'll look to take profit at 25% max.
I've gone ahead and shown defined risk wings for an iron fly/skinny iron condor setup on the chart -- the September 18th 28/32/33/37, which was paying 1.97 as of the writing of this post, just short of the one-half the width of the wings I look for out of an iron fly (i.e., this would be a four-wide iron fly, so would ideally look for around 2.00 in credit out of it).
OPENING: EWW AUGUST 21ST 32/33/35 BIG JL... for a 2.17 credit.
Notes: Relatively high rank/implied for an exchange-traded fund at 40/38. This isn't quite a Big Jade Lizard, which usually consists of an at-the-money short straddle with a long call, but it's trading between the strikes, so opened it up to a skinny at 32/33. No upside risk, since the total credit receives exceeds the width of the short call vertical at 33/35 by .17. Will look to take profit at 25% max (.54).