Blue-Chip Bank Stock Blasted by Calls

The 20 stocks listed in the table below have attracted the highest weekly options volume during the past 10 trading days, with data courtesy of Schaeffer's Senior Quantitative Analyst Rocky White. Stocks highlighted in yellow are new to the list. Standing out this week is financial institution JPMorgan Chase & Co (NYSE:JPM). Below, we'll take a closer look at the options activity surrounding JPM and see how its been performing on the charts lately.

Looking at White's data, over the past 10 days, 306,277 calls and 164,374 puts have been purchased. Calls have been especially popular lately, as JPM's 50-day call/put volume ratio of 2.08 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than all other readings from the past year. Today, though calls still outweigh puts, the weekly 5/29 100-strike put is most popular, followed by the 102-strike call in the same session, with new positions being opened at both.

In addition to the surge in options volume, now looks like an opportune time to buy JPM premium. The stock's Schaeffer's Volatility Index (SVI) of 42% sits in the 24th percentile of its annual range, suggesting that near-term options traders are pricing in relatively low volatility expectations.

On the charts, JPM has struggled to break out since its mid-March coronavirus-induced bear gap. Down 0.5% at $100.89 at last check, the investment banking name is now up 11.6% in the last week. However, the shares are seeing the rally run out of steam at their descending 80-day moving average, a trendline not conquered on a closing basis since Feb. 21.

Analysts seem to be on the fence, with five out of 15 in coverage sporting a "buy" or better while the remaining 10 carry a "hold" or worse rating. Meanwhile, the 12-month consensus target price of $106.65 is a 6.2% premium to current levels.