After some negative news about bribery in the government the Brazil's ETF (EWZ) got killed at the open with a 18% down move.
With the Implied volatility rank of the stock at the high's of the last 52 weeks(100%) it means that buying options is going to be expensive, in other words we are going to be selling overpriced options.
Betting that this is an over reaction and wanting to take as much credit as possible, I decided to sold a big lizard (Straddle with no upside risk) to get a nice premium.
The trade: 64 days to expiration
Sold the 33 Calls Sold the 33 Puts Buy the 36.5 Calls (no upside risk) Collected 3.95 per contract