How To Trade Japanese Equities Market Using Options
Japanese stock markets have experienced tremendous run. +80% in 6 months! That’s a raging bull, one of a kind, for any developed market in recent times. Having run up so much, Nikkei has quickly turned down and is technically close to bear market having dropped 15% from recent high just a week ago. Implied volatilities have jumped significantly indicating uncertainty amongst market participants.
If you don’t have access to international brokers and/or futures, there are various alternatives that you can use to trade your DIRECTIONAL or NON_DIRECTIONAL view of the Japanese equities market and also benefit from increase implied volatilities. Here is a list of Japan focused equities style underlyings that one, with a normal US trading account, can trade.
You may choose Ultra short like EWV, plain vanilla underlying or via options. Some of these underlying have liquid options as well e.g. DXJ which is a Wisdom Tree Japan Hedged Equity fund has ample liquidity with relatively tight bid/ask spread. Before you start trading on these, please find more information and understand how these work. Do you due diligence before spending even a single dollar based on above information.
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If you are not so sure you how to trade using option, check out this section containing numerous examples of strategies and detailed explanation.
Disclaimer– As of this writing, I have bearish positions on Japan. But I may change my positions any time without publishing any prior notice.