JP Morgan has been trending lower in recent weeks, but a large option trade sees limited downside and possibly even some bullishness.
The investment bank is up 2.4 percent to $32.52 as it continues to move in the middle of its recent range. But JPM is down significantly since trading above $48 in February, and it has seen lower highs since then while bouncing off support at $28 twice in the last several months.
A trader sold 10,000 February 27 puts for $0.71 against previous open interest was 699 in a new opening position, according to optionMONSTER's systems. Seconds later, 5,000 February 33 calls traded for $1.78. They were bought but done against larger open interest, so the trader could have been closing that position while opening the other.
The put selling is a bet that JPM will remain above $27 through expiration. The trader may also be showing more bullishness by using that income to buy the calls to profit from a rebound. (See our Education section)
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