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Upside trading lights up JP Morgan

Pete Najarian (ask-pete@optionmonster.com)

JP Morgan got a lift yesterday, and the bulls were chasing it higher.

Option action was heavy across multiple time frames in the financial giant, ranging from very short-term contracts to others that are years into the future, according to optionMONSTER's Heat Seeker tracking system.

The Weekly 40.50 calls expiring this Friday stuck out early, as more than 18,000 traded while the stock wavered between $40.38 and $40.50. Several blocks went for $0.33, but most priced for $0.36.

There was also activity in the January 2014 45 and January 2014 55 calls as investors looked for a sustained move well into the future.

Calls lock in the price where traders can buy a stock, so they can generate significant leverage in the event of a rally. If the stock doesn't rise, the options will lose most or all of their value. (See our Education section)

JPM rose 2.68 percent to $40.59 yesterday. The stock has pulled back from around $43 and is now bouncing around its 200-day moving average.

Almost 133,000 contracts traded in the name yesterday, about 4 times more than normal. Calls outnumbered puts by 100,00 to 30,000, a reflection of the session's bullish sentiment.

(A version of this post appeared on InsideOptions Pro yesterday.)

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