Sold 1 Put on EWZ Brazil ETF – 0.44% potential income return in 7 days
On December 29, 2023, I sold 1 put option on EWZ Ishares Msci Brazil ETF (NYSEARCA: EWZ) with a strike price of $34 and expiry on January 5, 2024. For this trade setup, I was rewarded with $16 (after commissions).
I come up with this trad idea quite spontaneously fter sipping some Indian White wine in Goa, India while planning our next holiday seasons vacation - agreeing to go to Brazil next year.
This is not trading advice. Investments in stocks, funds, bonds, or cryptos are risk investments and you could lose some or all of your money. Do your due diligence before investing in any kind of asset.
Here is the trade setup:
SLD 1 EWZ Jan 5 '24 34 Put Option 0.17 USD
What happens next?
On the expiry date, January 5 , 2024, EWZ is trading above $34 per share - options expire worthlessly and I keep premium - if EWZ trades under $34 on the expiry date, I risk getting assigned 100 shares and paying for them $3,400
Current break-even price: 34-0.16-0.07 = $33.84
In case of an assignment, I will turn this trade into a wheel strategy and will start selling covered calls.
Anyhow, if troubled with the strike price near the expiry, I will try to roll it forward and down, preferably for credit, before actually taking the stock assignment.
In total: 1 trade since December 29, 2023
Options premium: $15