IB Options Brief: JPMorgan Chase & Co. (JPM)

Posted September 6th, 2012 by Caitlin Duffy in Unusual Activity

JPM ñ JPMorgan Chase & Co.
Financial stocks are on a tear today after the ECB released details of its bond-buying plan amid a better-than-expected ADP report that showed private-sector employers added 201,000 jobs in August. Shares in JPMorgan earlier rallied to their highest level on an intraday basis since May 10th, climbing 4.7% to touch $38.87 in the first half of the session.

Options traders positioning for shares in the name to extend gains in the near term pounced on the newly issued weekly contracts expiring one week from tomorrow. Call volume is on the rise at the Sep. 14 í12 $38.5, $39 and $39.5 strikes. Roughly 1,400 calls changed hands at the $38.5 strike by midday, with much of the volume purchased for an average premium of $0.56 apiece. Traders long these in-the-money call options stand ready to profit next week should JPMís shares exceed the average breakeven price of $39.06.

Trading traffic spread to the Sep. 14 í12 $39 strike where more than 3,100 contracts are in play. Overall options volume of 166,735 contracts as of 12:40 p.m. ET on JPMorgan is well above the stockís average daily options volume of around 70,500 contracts. Calls are more active than puts, with the call-to-put ratio hovering around 1.6.

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