In short: Options Action, with Oliver Renick at Cboe. The raw activity: "it is very rare that you see the iShares EWZ in the top 20 traded securities among all options today, and that's where it is with 300,000 plus contracts exchanged and volume more than six times the 30 day average. More than $30 million in options premium has traded so far and 94% of it is tied to calls." The reason to read it as two-sided rather than bullish: "while the ETF has surged the past month, implied volatility has too. And today roughly half the call premium we see is being sold, meaning as many traders are using this ramp to fade the speed of the move as they are trying to chase it." The lottery ticket: "the most popular contract to buy today is the 45 strike call expiring in November, which needs another 20% plus to pay off." Possible causes he offers: surging commodity prices, or Brazil's election next month.
The EWZ is a fund holding the largest Brazilian stocks. It landed in the twenty most-active options names in the entire US market — extraordinary for a single-country fund — with six times normal volume and over $30 million of premium traded, 94% of it in calls.
A call is the right to buy at a set price later. Ninety-four percent call activity sounds like a wall of bullishness, and this is where Renick's detail earns its place: about half of that premium was being sold, not bought. Selling a call is the opposite bet — it pays you now and profits if the move stalls. So the flow is not a crowd piling in; it is a genuine two-sided fight over whether a rally that has already happened continues, with implied volatility (the price of the options themselves) elevated because of it.
The most-bought single contract makes the speculative flavour concrete: a November call needing another 20%-plus move to pay anything at all. Possible drivers named: surging commodity prices, and next month's Brazilian election.
In short: "Recently, some of the political situation in Brazil has caused… the Brazilian stock market to start to roll over a little bit." After a strong first half — "Latin America, first part of the year was a great place to be" — "this time, I think it's still sort of a wait-and-see."
Brazil was one of the year's best places to be in the first half and has now turned. The cause Newton names is political — "some of the political situation in Brazil has caused… the Brazilian stock market to start to roll over a little bit."
His response is not to short it but to step aside: "this time, I think it's still sort of a wait-and-see." For a technician, a market that has stopped going up on bad news of an unquantifiable kind is a position to exit, not to fade — the same emerging-market money he expects a weaker dollar to attract has better places to go, principally South Korea.
35:20And so, that's a good sign for emerging markets. We've seen China has been a little bit of the laggard this year. Recently, some of the political situation in Brazil has caused the ILF and really the Brazilian stock market to start to roll over a little bit. So, Latin America, first part of the year was a great place to be.
In short: Reference / contrast only. Hay "had suggested profit-taking with the Brazilian ETF, EWZ, earlier this year" after it "appreciated significantly from our two buy suggestions"; from its April 14th apex it has backed off just under 15% — "much less than BOLSY's 25% swoon, but exchange operators frequently fluctuate more than the stock markets to which they provide access." Cited to frame BOLSY's larger drawdown and the broader "correction within a structural bull market for real assets" in Brazilian equities — not a fresh call on EWZ (he still holds a reduced position after the profit-take).
In short: Reference — the previously-endorsed Brazil ETF, "a stellar performer," up 38.03% and 47.01% from the two prior plugs; cited as the backdrop for the new BOLSY pick (which "owns the main exchange for those shares").
In short: Performance recap — "surged 63%" since touted a bit over a year ago (the gain from the initial August-2024 recommendation a more modest, "yet still husky," 40%). The core Brazil long; "run a lot in a short time," so consider some gain harvesting. A winner update, not a fresh entry.
In short: The Brazil basket — commodity-producer + election + big rate-cut room fits the 2026 hard-asset theme.
EWZ is the broad basket of Brazilian stocks. Same thesis as Petrobras — a commodity-producing country with an election catalyst and big room for rate cuts, fitting his 2026 hard-asset/international-value theme.
37:59Real rates in Brazil are 15% after inflation, and the inflation rate is actually very tame, so the central bank has a lot of room to cut next year. So you can buy the EWZ. I love the oil names — Petrobras, for example, get a huge dividend. Commodity-producing countries, hard assets, 2026 — it fits right in. They've got the election and the rate cuts.
In short: The core long and easiest U.S.-investor route into Brazil ("the iShares ETF"): Brazil "deeply undervalued" — Bovespa P/E ~8 (CAPE below 8, among the world's cheapest), ~9% dividend yield (higher than its P/E, "an exceedingly rare occurrence"), Real ~40% below parity on REER, and a de-equitizing market (13% of listed companies gone since 2021) shrinking future supply. Popped ~10% to ~25.30 in three weeks so "a pullback is highly likely" — but "a lot more gas left in its tank." "A once in a one- or two-generation opportunity."
EWZ is a single fund that owns a basket of the largest Brazilian companies, so a U.S. investor can buy "Brazil" in one click without dealing with foreign brokers. Hay's argument is that Brazil is about as cheap as a stock market ever gets: its main index trades at roughly 8 times earnings, it pays a ~9% dividend (you're literally being paid a higher percentage in dividends than the price-to-earnings ratio — almost unheard of), and the Brazilian currency (the Real) is ~40% below its fair value, so you get the stocks and the currency on sale at the same time.
On top of that, Brazil has been shrinking the number of listed companies (13% fewer since 2021), so when money eventually flows back there won't be much stock to buy — which can push prices up fast. Everyone hates Brazil right now (sentiment "as bad as the 2008 financial crisis"), which is exactly the setup contrarians want. The ETF already jumped ~10% in three weeks, so he'd wait for a dip, but calls this "a once in a one- or two-generation opportunity." A long-term buy, not a quick trade.
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