Trump Rally Fuels JPMorgan Chase & Co. (JPM) Options Activity

As JPMorgan Chase & Co. (NYSE:JPM) trades in uncharted territory post-Trump, put open interest is at an annual high, with calls not that far behind

Dec 8, 2016 at 10:49 AM
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Bank stocks have been some of the strongest performers in the so-called post-election "Trump rally." Financial shares are trading higher again today, too, in the wake of the European Central Bank's (ECB) latest policy decision. At last check, Dow stock JPMorgan Chase & Co. (NYSE:JPM) was up 0.4% at $84.38 -- fresh off a record high of $85.43 -- bringing its post-election advance north of 20%. Amid this surge, financial shares have come under the watchful eye of options traders, with JPM one of the stocks with the most options volume over the past 10 trading days.

Specifically, JPM has seen 218,036 puts and 281,544 calls traded in the last two weeks, according to data compiled by Schaeffer's Senior Quantitative Analyst Rocky White. In fact, JPM put open interest is docked at a 52-week peak, with 895,811 puts outstanding. Call open interest is not far behind, with 856,209 JPM calls currently open -- in the 99th percentile of its annual range.

Drilling down on the past two weeks' worth of activity shows speculators bought to open 24,402 JPM calls at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), versus 20,030 puts. The stock's January 2018 70-strike put and 75-strike call saw the biggest rises in open interest over this time frame, with a respective 11,205 and 17,819 contracts added.

This relatively neck-and-neck action is continuing in today's trading, too, with 21,762 calls and 18,141 puts on the tape at last check -- roughly 1.4 times the volume that's typically seen in JPM's options pits at this point in the day. Most active is the stock's July 90 call, where it looks like one speculator bought to open a 3,500-contract block for around $1.2 million (number of contracts * $3.50 premium paid * 100 shares per contract) to bet on new highs by summer. Put players, meanwhile, may be selling to open the weekly 12/9 84 strike, hoping JPMorgan Chase & Co. (NYSE:JPM) maintains its footing atop $84 through tomorrow's close, when the series expires.

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