NEW YORK -- The big banks have not seen much option activity recently, but Wednesday traders turned bullish on JPMorgan
OptionMonster's tracking systems showed heavy buying in the May Weekly 55.50 calls that expire at the end of next month. Almost 6,000 contracts changed hands in quick succession for $1.38 to $1.45, dwarfing the strike's previous open interest of just 92 contracts.
These long calls lock in the price where the stock can be purchased through May 30 no matter how far it might climb. They could be sold earlier at a profit if premiums rise with a rally before then, but the contracts will expire worthless if shares stall or pull back.
JPMorgan's stock rose 0.43% to $56.05 Wednesday. The financial giant began the month above $61 but gapped down to the $55 level after reporting earnings on April 11. It has since been trading sideways along its 200-day moving average.
Total option volume in the name was slightly above average in the session, with calls outnumbering puts by more than 2 to 1.
Yamamoto owns JPM bonds.