JPMorgan suggests some options plays around Amazon's Prime Day and Apple's new iPhone release

Published Tue, Sep 29 20203:06 PM EDTUpdated Tue, Sep 29 20203:32 PM EDT

Jesse Pound @/in/jesse-pound @jesserpound

(This story is for CNBC Pro subscribers only). Scheduled events for two major tech companies could create an opportunity for options traders to make money off of volatility, JPMorgan said in a note to clients. Major tech stocks have struggled in September, with some of the biggest names falling 10% from their recent highs, and Wall Street investors have been bracing for elevated volatility around the November election. JPMorgan's note identified several new options strategies to "take advantage" of major events and expected volatility in the markets around the election. The strategies recommended by the bank include combinations of calls and puts. Call options give traders the chance to buy a stock at a pre-determined price before the option expires. If the stock price rises above the share price, a trader can exercise the option and buy the stock at a discount to the market price. A put option gives the holder the right to sell a stock at the predetermined strike price. One of the options involves Amazon 's Prime Day, now set for mid-October . JPMorgan analyst Doug Anmuth has an overweight rating on the stock. The bank advised clients to buy call options of Amazon for the week of Oct. 23 at a strike price of $3,255 per share and sell call options for the week of Nov. 6 with a strike price of $3,400 per share. In order for the call with the earlier expiration to be "in the money," the stock would need to rise about 3% from where it was trading on Tuesday. The sale of the other call option helps to pay for the premium on the first call option. "This structure positions investors to benefit from Prime Day and a potential new economic stimulus package (or consumer optimism thereof) while monetizing the rich election premium embedded in the November 6th options. We advise investors to close the short leg of the trade at/prior to the October 23rd expiry," the note said. Another options idea involves Apple , which JPMorgan analyst Samik Chatterjee has an overweight rating on. The bank recommended a call spread collar, which involves selling a put option to help finance the call spread. The idea behind the trade is to take advantage of the expected announcement of a new iPhone next month. Apple announced several new products in a Sept. 15 event but not a new phone . "Reports ... suggest online preorders for the new iPhone could open on October 16th with the devices hitting shop shelves in late October, in what may also coincide with a potential pull-forward of the holiday shopping season if news of a second economic stimulus package becomes increasingly more likely," the note said. The exact trade recommended is to sell a put option with a strike price of $99 per share, buy a call option at $120 and sell another call option at $128. All of those options are for the week of Oct. 30. In order for the put option to be exercised, meaning that the trade would lose money excluding the premium, shares of Apple would need to decline about 14% from where they were trading on Tuesday.

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(This story is for CNBC Pro subscribers only).

Scheduled events for two major tech companies could create an opportunity for options traders to make money off of volatility, JPMorgan said in a note to clients.

Major tech stocks have struggled in September, with some of the biggest names falling 10% from their recent highs, and Wall Street investors have been bracing for elevated volatility around the November election. JPMorgan's note identified several new options strategies to "take advantage" of major events and expected volatility in the markets around the election.