Option traders flock to Japan ETFs after stimulus move
April 4 (Reuters) The Bank of Japan bigger than canada goose expected stimulus plan triggered a flurry of option market bets on more gains in Japanese stocks and losses in the yen, as investors expect canada goose store the massive plan will strengthen Japan economy and further weaken its currency.
Call option traffic was concentrated in exchange traded funds that track Japanese equities, cheap Canada Goose along with speculative trades on leveraged funds that rally when the yen weakens.
The Bank of Japan, in a radical overhaul of its monetary policy, on Thursday promised to inject about $1.4 trillion into the economy in less than two years.
This was more than anticipated, and Canada Goose sale triggered a sharp selloff in the yen, which lost more canada goose coats on sale than 3 percent Thursday in its worst day against the dollar since canada goose factory sale 2008, while Japanese 10 year government yields uk canada goose hit record lows.
ETF with the word in it saw a large gap open this morning, said Steve Place, a founder of canada goose uk outlet options analytics firm investingwithoptions canada goose black friday sale in Mobile Alabama.
Volume on the Japanese stock focused ETFs was dominated by calls, contracts which grant investors the right to buy the shares of these canada goose clearance securities by a certain date. In fact, calls outpaced puts by a wide margin in the WisdomTree Japan Hedged Equity ETF and the iShares MSCI Japan Index Fund.
The DXJ is a slightly more complex product than EWJ, Canada Goose Jacket as it combines long Japanese equities with currency hedging.
options traders, the trade thesis is very simple: this initial move in the Japanese markets will continue, he said.
Shares of the DXJ ended 7.49 percent Canada Goose Coats On Sale higher to $43.88 and the EWJ ETF rose 4.1 percent Canada Goose online to $10.90. Option volume Canada Goose Parka in both products was above the daily average, according Canada Goose Outlet to options analytics firm Trade Alert. In all, 56,000 calls and 4,420 puts changed hands in the EWJ, 3.3 times the typical levels.
STRONG DEMAND FOR JANUARY CALLS More than 21,000 January $13 https://www.thecanadagooseoutlet.com strike calls were purchased in the buy canada goose jacket EWJ ETF on Thursday, strategists canada goose coats said. Open interest prior to Thursday was just 510 contracts, indicating a big increase in new positions, Trade Alert cheap canada goose uk data show.
The buying in that January $13 strike came in large blocks, indicating aggressive customers looking for at least a 20 percent rise by late January 2014 expiration, said Place of investingwithoptions. Kinahan.
The DXJ attracted heavy call buying as well, but canada goose uk shop Place noted the options for this product are not as liquid as EWJ. Total call volume on the DXJ rose to 7,483 contracts, five times its daily average, Trade Alert data show.
But Place noted the option action in the DXJ consisted of call buying and large spread orders, indicating that the option transaction was tied off with another position.
Another beneficiary of the activity has been WisdomTree Investments Inc, the canadian goose jacket manager of the DXJ ETF, which is up 68 percent since the beginning of canada goose clearance sale 2013.
is the asset manager of DXJ, and has seen large influxes of capital due to the success of their funds, Place said. buy canada goose jacket cheap momentum may continue as this Japan news continues Canada Goose Online to uk canada goose outlet bring in more investors canada goose uk black friday into their holdings.
Overall option volume was 3.7 times greater than Canada Goose Jackets average with a total of 4,933 calls and 832 puts traded on YCS, figures from Trade Alert showed.