Today’s tickers: JPM, UPL, AMGN, STI, MRK, TLT, SNY, NKE, TIBX, VALE & ROST

JPM – Option traders carousing in the August contract on JPM today appear cautiously optimistic on the stock amid a 0.5% rise in the underlying to $34.33. We observed some investors picking up 2,600 calls at the in-the-money August 34 strike price for 2.53 apiece and selling 2,800 calls at the higher August 40 strike for 56 cents each. Such transactions effectively create a trading range for the stock between the breakeven point on the purchased call options at $36.53 and $40.00. Put buying some 1,100 times at the August 34 strike for an average premium of 2.52 suggests caution by traders wary of potential bearish movement in the stock. Finally, those individuals looking for a roaring rally picked up 1,800 calls at the August 40 strike for 56 cents per contract. – JPMorgan Chase & Co.

UPL – The independent oil and natural gas company jumped onto our ‘most active by options volume’ market scanner late this afternoon after one investor was seen drilling for options in the September contract. Shares of UPL are currently slightly lower by less than 0.5% to stand at $40.60 for the day. The trader appears to have funded the purchase of calls today by initiating a sold strangle strategy. The strangle involved the sale of 15,000 puts at the September 34 strike price for a premium of 1.61 apiece in combination with the sale of 15,000 calls at the September 46 strike for 1.91 per contract. The gross premium on the transaction amounts to 3.52. The third leg of the trade, likely funded with the proceeds of the strangle, involved the purchase of 10,000 calls at the in-the-money September 40 strike price for a hefty 4.48 each. The trader is looking for shares to make bullish moves by expiration, however, he does not want the stock to rise beyond the parameters of the strangle. – Ultra Petroleum Corp.

AMGN – Two notable options plays on Amgen looked relatively bullish and suggest that an investor aims to defend a long position yet sees continued upside. First, using August puts a ratio combination wound up costing the investor a net 35 cent premium. The customer sold 20,000 August expiration puts to buy 10,000 puts at the higher 45 strike for a net debit of just 35 cents. In isolation the 45 puts would have cost 1.15. Sticking…
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