Options Bets on Brazil ETF Jump to Three-Year High
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Options traders are placing more bearish bets against a U.S. exchange-traded fund tracking Brazil than any time in three years, as policy makers raise borrowing costs to tame inflation in Latin America’s biggest economy.
The ratio of put options to sell the iShares MSCI Brazil Index Fund versus calls to buy has jumped 55 percent in the past two months to 1.72 yesterday and on Feb. 3 reached 1.81, the highest level since January 2008. The last time it reached this level, the fund tracking 83 securities plunged 62 percent over the next 10 months. The fastest-growing bets are February $69 puts. The fund hasn’t closed below $69 since Aug. 31 and gained