Why Japan ETF is seeing big put action

RELATED QUOTES

SymbolPriceChange
EWJ11.405-0.22

The biggest single print of the day is in the iShares MSCI Japan Index Fund, where one trader is apparently looking for more volatility.

The EWJ is down fractionally this afternoon to $9.13. The exchange-traded fund bounced off a 52-week low of $8.64 at the start of June and recovered to $9.50 at the start of this month. Shares were trading above $10 going into April.

optionMONSTER's Depth Charge system detected the purchase of 50,000 September 9 puts for the ask price of $0.21. The volume was 5 times the previous open interest, indicating clearly that this is a new position.

A block of 2.05 million shares of the EWJ traded for $9.12 less than two minutes earlier, so a trader appears to be combining the stock and the long puts to position for higher volatility . (See our Education section)

The implied volatility of the puts is 17.7 percent, in line with the average implied volatility for the EWJ, which is near 52-week lows. The 30-day historical volatility is 19.6 percent.

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