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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: chainik who wrote (42536)12/9/2005 9:01:19 PM
From: ild  Read Replies (1) of 116555
 
Are you talking to yourself? -g-

Short JEQ, long FJSCX or EWJ. I think it will eventually work as the premium will shrink when Japanese stocks correct. Of course it may well increase first.
20% premium is at the high end of what it historically was.
etfconnect.com
The biggest problem with shorting CEFs is the ability to borrow shares. JEQ has so small float that even if you were able to borrow shares your broker may force you to cover your short at any time, and it usually happens at the most inappropriate time for you (when the premium is at 40% -g-).

EDIT: I'm surprised that Japanese CEFs are still able to reach such rich premiums. When there were no EWJ they were the only thing to get exposure, but now we have EWJ. It is certainly advantages to buy CEFs when they trade at a discount, but why would someone pay a premium?
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