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Bulls look for quick rally in JPMorgan

Thursday, 5 Sep 2013 | 5:44 AM ET
Adam Jeffery | CNBC

Financials were on the move yesterday, and the fast money was targeting JPMorgan Chase.

OptionMonster's tracking systems detected heavy volume in the weekly 52.50 calls expiring this Friday, with big trades hitting early for $0.11 to $0.15. An even 16,000 traded in volume far above the strike's previous open interest of 2,685 contracts, indicating that new positions were established.

These calls lock in the price where shares can be purchased in the financial giant, letting investors cheaply position for a rally. These options also control the amount of money that can be lost if the stock falls.


Government vs. JPMorgan
Dick Bove of Rafferty Capital, Daniel Levy of McKool Smith and CNBC's Jeff Cox discuss the endgame for JPMorgan.

JPMorgan closed yesterday up 1.19 percent to $51.13. The question is whether it can hold onto its gains, which is a tough one to answer with Syrian action looming and possible changes in monetary policy by the Federal Reserve. But the use of short-term options keeps risk to a minimum while ensuring that investors won't miss a pop in the shares.

Overall calls outnumbered puts in the name by about 59,000 to 14,000, a reflection of the session's bullish sentiment.

—By CNBC Contributor Pete Najarian

Additional News: Has JPMorgan become a 'piñata bank'?

Additional views: Bove cutsJPMorgan, citing regulatory 'McCarthyism'

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Disclosures:

Pete Najarian is a professional investor, CNBC contributor, regular co-host of CNBC's "Fast Money" and co-founder of OptionMonster.com. Najarian has owns JPM calls.

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