Is Now the Time to Bank on JPMorgan Earnings?

Are options traders banking on blowout earnings from JPMorgan ?

JP Morgan Chase
JP Morgan Chase

If today's price action in JPMorgan calls is any indication, the answer is a resounding “Yes.”

The stock has rallied almost 20% the last 17 trading days. And yet, traders continue to makes bets that there is more upside to come.

"The nine of the top ten most active options in JPMorgan are all calls," noted Mike Khouw, Options Action Contributorand Cantor's Fitzgerald’s Director of U.S. Derivatives.

In one trade, an investor paid $1.00 buying the March 46/50 call spread, a bet that pays out if JPMorgan stock trades above $47.00 by March expiration.

"Given how well fixed income has done, people are expecting a good number. And CEO Jamie Dimon knows how to talk a good game," said FBR Capital Markets Analyst Paul Miller (BUY RATING).

Still, Miller says some traders could be setting themselves up for disappointment.

"The private label putback issue has not gone away, and that could weigh on the stock going forward."

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