In this Market Measure Tom and Tony take a look at the ETFs that cover the emerging markets (EEM) and China (FXI).
The emerging markets are highlyto China since it makes up roughly ⅓ of the index. But, how do they compare in risk when looking historically at selling premium in both? The Study
- 2011- Present, 45 DTE
- sold 1 Strangles in EEM & FXI
- at 50% of maximum profit
Based on Average P/L, win ratio, average loss and maximum loss, FXI historically experienced greater losses and a lower P/L in comparison to EEM. Additionally, when higher IV Rank was taken into account, both underlyings experienced a boost in average P/L and win ratio.
For further detail and the valuable takeaways on FXI and EEM, tune into the segment.