Japan Fund Draws Big Bullish Bet

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A large bullish bet is targeting the WisdomTree Japan Hedged Equity Fund, which has been rallying for more than four months as the country tries to revive its long-stagnant economy.

A trader purchased 7,600 May 47 calls at the same second on Friday for $0.65, according to OptionMonster's tracking systems. This is clearly a new position, as open interest in the strike was a mere eight contracts before the day's trading began.

The fund's shares rose 1.44 percent on Friday to finish the week at $44.51, their highest close since September 2008. The exchange-traded fund, which tracks major Japanese equities while adjusting for currency fluctuations, has soared more than 40 percent since last November, with unprecedented stimulus policies from the Tokyo government and the Bank of Japan.

Friday's long calls, which lock in the price where traders can buy the stock, are looking for the DXJ to gain another 7 percent or more by mid-May. These contracts could be sold earlier at a profit if their premiums rise with a rally before then, but they will expire worthless if the stock remains below the $47 strike price.

The fund saw total option volume of 13,351 contracts on Friday, eight times its daily average in the last month. Calls outpaced puts by more than 5 to 1, a reflection of the day's bullish sentiment.

—By CNBC Contributor Mike Yamamoto

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Mike Yamamoto is a professional investor, CNBC contributor, and Managing Editor of OptionMonster.com. Yamamoto owns DXJ shares.