EMB trade ideas
#EMB trade plan up to 15-Sep-23We recommend keeping an eye on this ETF, since the July 25 straddle confirms the range bounds. The straddle was developed with significant financial involvement.
EMB ShortiShares $JPM $USD Emerging Markets #Bond ETF. The fund tracks an index of US-dollar-denominated sovereign debt issued by emerging-market countries with more than $1B outstanding and at least two years remaining in maturity.
Today the EMB 3/17 86P in large size were opened today...
Currency risk: Betting against the debt of a country with a currency that is likely to depreciate relative to the US dollar can be a way to hedge against currency risk. If the value of the local currency drops, the US-dollar-denominated debt becomes more expensive to repay, which could lead to defaults.
Interest rate risk: Emerging-market countries may have higher interest rates compared to developed countries, which increases the cost of servicing the debt. If global interest rates rise, this could make it more difficult for these countries to repay their debt and increase the risk of default.
Refinancing risk: Many emerging-market countries have large amounts of short-term debt that needs to be refinanced regularly. If global financial conditions tighten, it may become more difficult for these countries to secure new financing, increasing the risk of default.
Debt sustainability: Some emerging-market countries may have high levels of debt relative to their economic output, which could increase the risk of default. If their economies are not growing fast enough to generate the revenue needed to repay the debt, this could lead to defaults.
Overall, betting against US-dollar-denominated sovereign debt issued by emerging-market countries involves taking a bearish view on these countries' ability to repay their debt and manage their financial obligations.
Market Alpha - EMBNASDAQ:EMB
As a way to get exposure to the China housing debacle.... I go over my chart on a new position I opened that has relatively low volatility considering the weight of exposure it may have to the chinese housing collapse.
Trade Idea (IRA/Retirement Account): EMB May 21st 103 Short Put.. for a .95/contract credit.
Notes: With a current yield of 4.032% (4.381/share annualized) versus a TLT (20 Year + Maturity Treasuries) yield of 1.607%, a play to acquire this emerging market bond fund at a 102.05 break even or below. On a one-lot basis, a bit buying power heavy, so consider acquiring a smaller amount of shares if it ever gets to around this level if short putting isn't an option here.
Me personally, just looking to deploy some idle buying power while I wait for an uptick in broad market volatility here in an underlying where, if assigned, I get paid to wait as I reduce cost basis via selling call against. An alternative go-to would be in HYG (current yield 4.676%; 4.142/share annualized), where I could see selling acquisitional puts in the low 80s (e.g., the May 83 short put (68 DTE) is paying .69 here.
Emerging Market Bonds To Move Lower?Emerging market bonds denominated in USD look to be taking a leg to the downside.
Could this be an early signal of global liquidity drying up again? 👀
The monetary policy suggests stimulus but fiscal policy is at a stand still. Without more cooperation between politicians and parties this could become an issue sooner than later.
Received a Correlation request on the dollar vs emerging marketsPlease be sure to share and let me know if you have questions or disagree.
TRADE IDEA (IRA): EMB JUNE/JULY 94/92 SHORT PUT LADDERAlthough IV is not ideal here (20.1%), this is another one I've had on my IRA shopping list with its current yield of 4.98% and divvies paid monthly.
I would go only two rungs at the moment, since there are only June and July expiries currently available, with the next available in September, with liquidity progressively waning as you go out in time. The two-rung in June/July is paying 2.70 at the mid, with a three-rung at the June 94, July 92, and September 90 strikes, paying 5.22. Naturally, a buying-power heavy proposition ... .
Evidence of risk appetite in stocks?Looking at Emerging Market Debt vs. US Treasury Bonds ratio - is this evidence of risk on?
$EMB | Monthly TF | Emerging Markets - Bull Flag Breakouttrend has been identified
now find good risk reward set-ups and use good risk management with stops
$EMB | 4HR Timeframe | Losing Momentum | Bearish Divergenceat resistance, logical place for the bulls to take profits, watch out for dis bearish divergence
False brake candidate in ratio of $EMB with $EMBLPotential swing high in the making $DXY, $TLT, $TNX
