This Iran war has caused Asian stocks to get clobbered. A large part of the issue is that Asia’s oil flows through the Straits of Hormuz so if that shipping lane is disrupted, it will cause havoc with Asian economies as energy costs soar.
The KOSPI has been hit hard and is down 12 percent but that doesn’t mean it’s the end of the world. If you have a long term time horizon there are potential good investments to be made.
While the KOSPI is down the ETF that tracks this exchange EWY is also down but the call options are offering a whopping 21.8 percent return when things normalize.
I took a chance and bought 100 shares of EWY at $135.39 and sold the January 15 2027 $140 strikes for a nice premium of $2790. If EWY is above $140 in January I will have made a total of 21.8 percent return.
Of course, if the Iran war drags on for weeks, months or years then Asian economies will be in shambles so there is risk here. This is a relatively small position for me so I’m willing to bear the risk given the reward structure but there are no guarantees.
AI didn’t recommend this trade, I just found this all on my own by reading some news headlines and decided to check things out.
Here are two headlines and check the date & time of each one. Literally 24 hours period.
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Are you taking advantage of the crazy volatility in this market?