This Week in Emerging Markets Volatility

In line the developed markets, emerging markets were lower last week. The iShares MSCI Emerging Markets Index (EEM – 41.33) was down about 1% and more dramatically the iShares MSCI Brazil Index (EWZ – 54.06) lost more than 3% on the week. Concerns about Brazil and China, two of the largest influences on EEM, continue to mount, but do not seem to have appeared in the level of VXEEM and VXEWZ yet. The key word may be yet in that sentence. 

With both markets lower, the respective volatility indexes were higher, but still below historical averages. The point is if you believe there may be a pull back on the horizon for developing markets, there is still time to take a position in either the options or direct futures contracts. I did note 200 January 2013 VXEEM Futures traded Friday along with 50 November 2012 VXEW Futures contracts. Could be a trader or two believes emerging markets may come under some pressure in the next few week. As with every trade, time will tell.

EEM EWZ.jpg