Buy Mexico Put Options as Prices Slide to Record Low, BNP Says

Investors should buy bearish Mexican stock options at record-low levels because the equities may slide “dramatically” as the Federal Reserve ends its stimulus and Europe struggles with its debt crisis, BNP Paribas SA said.

Anand Omprakash, a New York-based equity derivatives strategist, recommended buying September $55 puts to sell the iShares MSCI Mexico Investable Market Index Fund, which rose 1.8 percent to $62.20 yesterday in the U.S. The options are “inexpensive” after the ETF’s implied volatility, the key gauge of option prices, for at-the-money options expiring in three months fell to a record low of 19.76 yesterday, he said.