Bet Against JPM? Not Wise Says Dick Bove

Who knew Options Action had so many fans?

Last Friday, Dan Nathan of Riskreversal.comsuggested a bearish bet on best of breed bank JP Morgan , and today a similar trade printed in size.

Specifically, Dan recommended buying the September 34/30 put spread for $0.90. Today, over 11,000 contracts of the 35/30 put spread traded hands.

So why are options traders betting against the so called "strong bank" when there are so many other seemingly weaker targets?

"While JP Morgan's in better shape than some of its money center brethren, they will not be immune when people want out of the financials," said Nathan.

Still, with JP Morgan's pristine balance sheet and superior management, betting against its stock might be a losing endeavor, especially if the overall economy can avoid a recession.

"While other banks are retreating, JP Morgan is expanding," said Rochdale's Dick Bove (BUY rating). "And if we can avoid a double dip, they'll be the clear winners.

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