Learn the trade here. Make it on tradeMONSTER

Options Trading News

June 3, 2013  Mon 12:19 PM CT

DXJ: SEE CHART GET CHAIN FIND STRATEGIES
Japanese stocks have pulled back since starting the year with a monster rally, but now some bulls are coming back.

optionMONSTER's Heat Seeker monitoring system detected heavy call volume in two exchange-traded funds linked to the country's equity markets. First, they targeted the WisdomTree Japan Hedged Equity Fund (DXJ), buying the July 50 calls for $0.70 and selling the July 55s for $0.15. Some 20,000 traded in both, more than 6 times previous open interest.

They paid $0.55 to open this vertical spread and will collect $5 if the fund closes at or above $55 on expiration. That's a potential gain of 809 percent from a 25 percent move in the underlying index. (See our Education section for more on how to harness the leveraging power of options.)

The DXJ is down 3.62 percent to $44.60 in afternoon trading. It appreciated more than 30 percent between mid-December and mid-May as the Japanese market broke out of a multi-decade slump but has been falling sharply since.

The iShares MSCI Japan Fund, a competing product with the DXJ, grabbed attention less than an hour later. This time buyers kept it simple, snapping up about 11,000 September 12 calls for $0.15 and $0.16. They also bought the Weekly 10.50 calls expiring this Friday for $0.24 to $0.26.

The EWJ is off 2.21 percent to $10.60 and has performed similarly in recent months as the DXJ.

Total option volume is 5 times greater than average in DXJ, with calls outnumbering puts by 12 to 1. The EWJ's activity is only slight above normal amounts.
Share this article with your friends


Related Stories

DXJ

Trade sees more gains in Japan

October 27, 2014

A large trade is betting that the WisdomTree Japan Hedged Equity Fund will continuing rallying for the rest of the year.

DXJ

Put sellers see Japan ETF holding

October 24, 2014

The WisdomTree Japan Hedged Equity ETF has been rebounding in the last week, and traders are betting that it will hold firm in coming months.

DXJ

Japan ETF faces downside position

October 15, 2014

A large trader is positioning for further losses in the WisdomTree Japan Hedged Equity Fund, which has fallen sharply in recent weeks.

DXJ

Huge call spread targets Japan fund

October 3, 2014

The WisdomTree Japan Hedged Equity Fund attracted a huge bullish call spread yesterday even as shares continued lower.

Premium Services

Free Webinar Series

The 100K Challenge

Education & Strategy

Anatomy of a butterfly

One of the many esoterically named option strategies is known as a "butterfly." But don't be fooled: Like other advanced...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER