Scott Nations Suggests An Options Strategy In iShares MSCI Japan Index (ETF) (EWJ)

On CNBC's Options Action, Scott Nations talked about an options strategy in iShares MSCI Japan Index (ETF) EWJ. He said that Japan is going to recover, but he thinks that it would not be a good idea to simply buy call options, because when EWJ bounces implied volatility will come out of the market and he will lose money.

Scott Nation suggested that investors should buy a call calendar. Specifically, he wants to sell the April 11 call for $0.15, and buy the September 11 call for $0.40. This trade would cost him $0.25, and his break even would be at $11.25.

iShares MSCI Japan Index (ETF) (EWJ) fell 0.20% in the regular trading session, and it closed at $10.03. In the after hours, it dropped 1.84% to $9.84.