Today’s tickers: JPM, MS & DF
JPM – JPMorgan Chase & Co. – A couple of options strategists appear to have exchanged sizeable blocks of long-dated calls and puts on JPMorgan this morning to position for shares in the name to rebound, or to at least hold, above recent multi-year lows. Shares in JPM came up for air today, rising 0.70% to $29.48 by 11:55 am in New York, following steep declines earlier in the week. The stock has tumbled nearly 40% since the first full week of April. One investor positioning for shares in JPM to at least hold above $29.00 come March 2012 expiration, sold some 7,000 puts at the Mar. 2012 $29 strike to pocket premium of $4.20 per contract. The investor may walk away with the hefty premium received on the sale of the time-rich, closest-to-the-money put options, as long as shares in JPM exceed $29.00 at expiration next year. The large short put position indicates the trader could wind up having 700,000 shares of the underlying stock put to him at an effective price of $24.80 each – after factoring in options premium – should the put contracts land in-the-money at expiration.
Meanwhile, a large stake in Mar. 2012 call options benefits the owner if JPM’s shares take off running to the upside within the next six months to expiration. It looks like one investor snapped up 5,000 calls at the Mar. 2012 $38 strike for a premium of $0.85 each within the first 15 minutes of the opening bell this morning. The call buyer profits at expiration if shares in JPMorgan Chase & Co. jump 31.8% over the current price of $29.48 to surpass the effective breakeven point at $38.85. But, the investor need not wait until expiration to potentially rake in profits…
