OptionsHouse

Options Trading News

September 4, 2013  Wed 5:16 AM CT

JPM: SEE CHART GET CHAIN FIND STRATEGIES
Financials were on the move yesterday, and the fast money was targeting JP Morgan.

optionMONSTER's Heat Seeker system detected heavy volume in the Weekly 52.50 calls expiring this Friday, with big trades hitting early for $0.11 to $0.15. An even 16,000 traded in volume far above the strike's previous open interest of 2,685 contracts, indicating that new positions were established.

These long calls lock in the price where shares can be purchased in the financial giant, letting investors cheaply position for a rally. These options also control the amount of money that can be lost if the stock falls. (See our Education section)

JPM closed yesterday up 1.19 percent to $51.13. The question is whether it can hold onto its gains, which is a tough one to answer with Syria action looming and possible changes in monetary policy by the Federal Reserve. But the use of short-term options keeps risk to a minimum while ensuring that investors won't miss a pop in the shares.

Overall calls outnumbered puts in the name by about 59,000 to 14,000, a reflection of the session's bullish sentiment.

Disclosure: I own JPM calls.

(A version of this post appeared on InsideOptions Pro yesterday.)
Share this article with your friends


OptionsHouse

Premium Services

Education & Strategy

Using spreads to minimize risk

Last week we discussed the risk vs reward profile of a debit call spread in Wells Fargo (WFC). This week we will run thru the risk vs reward of selling a credit put spread to achieve the same exposure of that debit call spread.

View more education articles »