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February 4, 2010 8:26 EST Related Symbols: JPM
you're watching:
Mad About Options
An options-related take on Jim Cramer's latest recommendations and analysis on the latest securities and ETFs getting attention on the Street.
ONN.tv reviews outcomes for bull and bear trades in the banking giant.
Mad About Options takes a look at the stocks getting coverage from Jim Cramer, Fast Money casts and other heavy hitters in the financial press and reviews strategies option traders might have used if they agree or disagree with these assessments of the underlying stocks.
The Pick – J.P. Morgan Chase & Co. (NYSE: JPM)
On Oct. 14, JPM announced earnings figures of 82 cents a share, which beat analysts’ estimates by 30 cents. JPM shares are now trading around $40.50, down from $46.90 at the time of our initial Mad About Options discussion of the stock.
Bullish Option Trades on JPM:
On Oct 19., Mad About Options highlighted JPM and said bullish investors bought December 25 calls for $22 and sold December 47 calls for $2.70. Investors paid $19.30 for this bull call spread, which expired with the stock at $40.95. This trade was a loser of $3.35, but option investors outperformed stock investors who would have lost $6.40 had they been long stock.
Bearish Option Trades on JPM:
Bearish investors bought March 55 puts for $9.70 and sold March 45 puts for $3.50 to pay $6.20 in this bear put spread. The spread is now marked at $10, making this trade a winner of $3.80 with the stock down $6.40.
If you’d like to see the profit and loss details in chart form, examine the probability of this trade’s success, or project the outcome of this or any options trade, open a virtual trading account at OptionsHouse.
