He compared the performance of the ETF with the performance of Ishares Msci Taiwan ETF (NYSE:EWT) and Ishares Msci South Korea ETF (NYSE:EWY) and he concluded that EWJ is lagging behind these ETFs. He expects EWJ to catch up with EWT and EWY and he sees a 6% to 8% of upside potential.
Mike Khouw wants to use options to trade EWJ. He wants to buy the January $63 call for 65 cents and sell the November $63 call for $20 cents. The trading structure would cost him 45 cents and he is hoping the stock is going to close below $63 at the November expiration and then rally above $63.45, going into the January expiration.