While I have a long way to go before I become the next Manny Mota, yesterday I was delighted to be able to pinch hit for Steve Sears of Barron’s for the twelfth time, when I penned Emerging Market Stocks: Have They Hit Bottom? as a guest columnist for The Striking Price.
In the Barron’s article I talk about how rapidly increasing uncertainty and risk in emerging markets during January was largely responsible for the 31.7% VIX spike on January 24, but was nowhere near the levels of June 2013, at least as measured by the CBOE Emerging Markets Volatility Index (VXEEM).
I also used the VXEEM:VIX ratio and some other data to support the idea that emerging markets have likely bottomed and are poised for a bounce. I concluded the Barron’s column with a couple of options trade ideas to take advantage of a reversal in emerging markets.
When I wrote the article, on Tuesday, my position on emerging markets was very much a case of going out on limb. By Friday’s publication date, which includes Tuesday’s option pricing data, emerging markets had already experienced a significant bounce and my emerging markets thesis no doubt sounded much less provocative than it would have three days earlier.
In any event, I strongly believe that emerging markets (EEM) and VXEEM bear close watching going forward, as the Fed moves toward a new policy direction, emerging markets grapple with rising interest rates in the U.S. and the global economic growth story has many critical ripple effects across the full emerging markets landscape.
- Watching Two Emerging Markets Currencies
- VXEEM as a Measure of Emerging Markets Volatility and Risk
- VXEEM vs. VIX Indices and Futures in Today’s Selloff
- Charting the Recent Decline of the BRIC Components
- The BRIC Bull
- Russia Leading the BRIC Rally
- BRIC Update: China a Leader or an Outlier?
- Time to Be Long China?
- When to Short China?
- Implied Volatility Over 150 in EWZ, the Brazil ETF
- Brazil Rallies While China Struggles
- Chart of the Week: Emerging Markets
- The Emerging Markets Engine
- A Global Indicator to Watch
A full list of my Barron’s contributions:
- Emerging Market Stocks: Have They Hit Bottom? (March 28, 2014)
- How to Spot Risk Early (July 16, 2013)
- How to Insure Your Stock Portfolio (April 18, 2013)
- The Case for Options Trading (January 2, 2013)
- Calm Down and Exploit Others’ Anxieties (November 14, 2012)
- How to Trade Options Around Volatile Events (July 10, 2012)
- Be Greedy While Others Are Fearful (May 3, 2012)
- Ways to Turn Volatility into an Asset Class (January 12, 2011)
- There’s Opportunity in Uncertainty (November 18, 2010)
- Will Market Volatility Return to Crisis Levels? (September 15, 2010)
- The Perils of Predicting Volatility (May 20, 2010)
- Take a Longer View on Volatility (July 2, 2009)
Disclosure(s): CBOE is an advertiser on VIX and More