Japan Fund Draws Large Bullish Trade

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The WisdomTree Japan Hedged Equity Fund has been highly volatile this year, and yesterday the bullish option paper was flowing again.

OptionMonster's tracking systems detected the purchase of 9,000 August 47 calls in one print yesterday for $1.20. The volume was above the strike's previous open interest, so this is clearly a new position.

Calls cheaply lock in where the stock can be purchased no matter how far it might rise. They can also generate significant leverage from relatively small moves in the share price.

The fund ended the session up 1.19 percent to $44.28 yesterday. The exchange-traded fund, which tracks Japanese stocks while adjusting for currency fluctuations, shot up from under $32 to above $52 between November and May but then pulled back as the broader market retreated.

More than 38,000 options traded in the fund yesterday, well above its daily average of 25,642 in the last month. Calls outnumbered puts by more than 5 to 1.

—By CNBC Contributor Pete Najarian

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Pete Najarian is a professional investor, CNBC contributor, regular co-host of CNBC's "Fast Money" and co-founder of OptionMonster.com. Najarian has no positions in DXJ.