Options Trading News

April 12, 2013  Fri 10:14 AM CT

A big put trade tops the options activity in JP Morgan even though shares are showing minimal reaction to its earnings announcement this morning.

optionMONSTER's Depth Charge system shows that a trader sold 21,000 May 48 puts for $0.65, less than the bid price listed, in volume well above the previous open interest of 7,041. Seconds later, he or she bought 24,442 April 48 puts for the ask price of $0.17. The open interest at that strike was more than 33,000, so that could have been an opening or closing trade.

If it was an opening trade, this is basically a calendar spread set to profit if JPM is around $48 at the end of next week. But it is more likely a roll, with the trader moving a short-put position out a month as the April options have lost most of their value and will expire in a week. (See our Education section)

JPM is down fractionally at $48.97 this morning. The financial giant was at a high of $51 a month ago and tested support at $47 last week.

More than 180,000 JPM options have already changed hands so far, compared to a daily average of 73,000.
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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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