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Brazilian Equities Surge as Options Traders Bet Big on EWZ ETF
cnbc · 2026-09-02
EWZ, .VIX, .NDX, EWZ, GOOGL
Brazilian stocks are outperforming the Nasdaq-100 this year, with options volume for the iShares MSCI Brazil ETF hitting record levels amid bullish sentiment.
What Happened
Market Performance Shift: Brazilian equities have staged a robust recovery, with the iShares MSCI Brazil ETF (EWZ) climbing 19% year-to-date and outpacing the Nasdaq-100's 15% gain. This rally follows a period of decline from April highs and is potentially supported by rising commodity prices and political optimism ahead of the October general election.
Options Market Activity: Trading volume in EWZ options spiked to six times its 30-day average, positioning the ETF among the top 20 most traded securities. This level of activity for a non-U.S. asset is highly unusual, signaling intense investor interest and a shift in market sentiment toward Brazilian exposure.
Bullish Sentiment and Positioning: Data indicates a strong preference for call options, with $48 million of the $50 million in traded premium tied to call contracts. While a portion of these calls are being sold, the concentration of top-traded contracts in bullish instruments suggests that traders are actively positioning for further upside or utilizing complex spread strategies.
Volatility and Risk Dynamics: Implied volatility has risen significantly, climbing from 0.28 to 0.39, making options the most expensive they have been since late June. The increase in premium costs suggests that traders are balancing directional bets with strategies designed to capitalize on the heightened price swings within the Brazilian market.