Thursday, January 7, 2010

Brazil Set To Raise Interest Rates, Currency To Move Wildly: Straddles

There are many rumours and surveys being circulated that Brazilian interest rates are going significantly higher this year, possibly in excess of 12%. If this were to happen, it will be extremely difficult for the government to stop the Real from appreciating even further.

Here are straddles on EWZ, the main Brazil ETF. These are stocks, not currency. The currency ETF BZF currently does not lend itself well for straddles. it tardes around $27, with strikes only at $30 and $25, with little volume.

Computed with StraddlesCalc Tool.

We track live all global ETFs and all currency ETFs.

This is not advice. Please do your own due diligence. Options are very dangerous and may cause 100% loss.

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Currency Rates said...
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