Japanese stocks have been gaining, and the bulls see more gains on the horizon.
optionMONSTER’s Heat Seeker monitoring program detected the purchase of 19,755 August 49.38 calls on the WisdomTree Japan Hedged Fund for $1.09. An equal number of August 52.38 calls were sold at the same time for $0.29. Volume was more than triple open interest at both strikes, which indicates that new positions were initiated.
The investor now has a right to buy DXJ stock for $49.38 but must sell it for $52.38 if it climbs above that level–a spread of $3. He or she paid $0.80 to open this bullish call spread and stands to make 275 percent if the fund moves to the higher price. (See our Education section)
DXJ is down 0.22 percent to $48.48 in afternoon trading but is up 4.5 percent in the last month. That’s more than twice the performance of the S&P 500 in the same period. We have also seen profitable trades recently in a related exchange-traded fund, the iShares Japan Fund, andresearchLAB shows capital moving into Japanese banks.
— Option Monster