Update on PowerShares Emerging Markets Sovereign Debt Portfolio (PCY) Trade

The PowerShares Emerging Markets Sovereign Debt Portfolio (PCY) September 2010 puts that I bought didn't fair especially well during the April 2010 (1930?) blow-off top rally, but that's OK.

I bought them as cheap insurance and there is still time left until expiration. Even though the managers seem to turn over the portfolio frequently, it is still loaded with some sketchy emerging markets paper! Republic of Indonesia 2035s! Mexican 2031s! Hoo boy!

I am developing an extremely bearish market thesis that I will share later, but I think people will demand a much higher yield than 6.29% to own this emerging markets sovereign debt.

This is one of the most asymmetric risk/reward trades on a big crash that I have.