Range-bound play in Japan fund

optionMONSTER

A large trader is looking for the WisdomTree Japan Hedged Equity Fund to stay trapped in a range.

optionMONSTER systems show that 10,000 December 52 calls were sold for the bid price of $0.25. The previous open interest was just 5 contracts, so this is a new position.

A few minutes later a block 135,000 DXJ shares was bought for $47.74. The combination of stock and short calls creates an overall strategy that is looking for lower volatility than that implied by the options and/or for shares to remain range-bound. (See our Education section)

The DXJ was up 0.78 percent yesterday to close at $47.52, in the middle of its recent range. The exchange-traded fund has seen resistance around $49 going back to May as it came off highs near $54.

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