Big bank earnings kick off next week with JPMorgan Chase, Wells Fargo, Bank of America, Citigroup and Goldman Sachs all on tap to report fiscal 2015 second-quarter results. And on Thursday, options traders are piling into one name in particular ahead of its report on Tuesday before the bell: JPMorgan.
"More than 100,000 call contracts exchanged hands today and that's more than two times its daily average," options expert and CNBC Contributor Mike Khouw said Thursday on CNBC's "Fast Money. " And according to Khouw, a majority of the activity was spurred by a trade betting that JPMorgan could rally more than 4 percent by the end of next week.
Specifically, that trader purchased 20,000 of the July 67.50 calls and sold 40,000 of the July 70 calls for a total cost of 40 cents. In this strategy, the trader makes money if JPMorgan shares rally to $70 by July expiration, or next Friday.
"This is a really interesting trade because over the course of the past eight quarters this is approximately the magnitude of the move we've seen in the stock post-earnings," said Khouw. "This is a really intelligent way to spend a small amount of money to make a bullish bet that the stock rallies after earnings."
JPMorgan Chase has outperformed the broader market year-to-date. The stock is up 7 percent while the XLF, the ETF that tracks financials, is down less than 1 percent in the same period.
Wall Street analysts surveyed by FactSet are expecting the company to earn $1.43 in the second quarter on $24.46 billion.