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Leveraged ETFs used to bet on and against Japanese stocks have become so popular that they're now closed off to new orders. And that could mark a top for the Japanese market, some traders warn.

The liquidity of Nikkei futures can no longer adequately support the buying and selling of three leveraged Nikkei 225 ETFs trading on the Tokyo Stock Exchange, meaning that new money will no longer be allowed to flow into the ETFs, their operator, Nomura, announced late Thursday.

The incredible growth of these products — two of which are effectively short positions on the Nikkei, but the most popular of which replicated a leveraged long position — "indicates that long Japanese stocks and short yen could be the most crowded trade in the world," investor and CNBC contributor Brian Kelly wrote Thursday.

That means, in turn, that "if and when everyone decides to close that trade, the exit could be ugly," Kelly continued.

Gerhard Joren | LightRocket | Getty Images

The news doesn't inspire everyone to paint such a bearish case, however.

"Ultimately investors tend to chase returns, and so if they can't get exposure to that market through the futures market [and the leveraged ETFs that use it] most likely their next stop is just going to be the stocks," Erin Gibbs of S&P Investment Advisory Services said Thursday on CNBC's "Trading Nation."

"Until we see the markets pull back and investors leave the asset class, I don't see any catalyst for seeing these volumes come down," said Gibbs.

The Nikkei has fallen considerably in the past three months, but is still up 20 percent in the past year, outperforming most major global markets. The leveraged bullish ETF, meanwhile, has risen 34 percent.