$EWW bears collect profits on tariffs

Bearish option traders are collecting profits in downside positions on the iShares Mexico ETF today, on the back of a tariff announcement last night.

On Tuesday, Investitute’s market scanners identified the purchase of 7,500 Weekly $43 puts, expiring today, for $0.20 and $0.21 with shares at $43.50. Volume was well above the strike’s open interest of 1,223 contracts, showing that this was a new position.

Those puts sold for as much as $0.57 today, more than 2.5 times times their purchase prices. The stock fell 2.25% in the same time frame, a huge move but still nowhere near that of its options on a relative basis.

Long puts lock in the price where a stock can be sold no matter how far it might drop, gaining value in a selloff with the potential for significant leverage. The contracts can be purchased either as an outright bearish bet or a hedge on a long-stock position.

EWW opened near its low for the day of $42.15 before pulling back higher to close at $42.92, still down 3.64% for the session. The ETF, which tracks a basket of Mexican equities, dropped after U.S. President Donald Trump last night announced the intention to implement a 5% tariff on imports from the U.S.’ southern border.