J.P. Morgan (JPM) – Buy Calls on Dips – Oct 14th, 2019
Bullish – JPM $116.14 – Financials
The S&P 500 (SPY) made a bullish breakout last week on speculation about a China trade deal. But it faded in the last 30 to 40 minutes of trading Friday after traders learned that the partial deal won’t be ready to sign for at least five weeks. Over the weekend, there was considerable uncertainty about how bullish the deal will be. Therefore, even though SPY has been bullish for years, we believe that the short-covering late last week could be over and more volatility is likely ahead.
JPM Trade Idea:
On CNBC’s OptionsAction show on Friday, Dan Nathan recommended that investors buy JPM on dips. JPM has been best in breed for the financial sector that has been weak. He sees binary catalyst events that may push JPM higher including earnings on Oct 15th. He suggested limiting risks by buying JPM Dec 20 $120 calls for $3.00, or about 2.5% of the stock price. As of Friday’s close, these calls were trading at $2.64. OptionsPlay suggests managing risks by cutting losses if the price of the option falls to about $1.35.
We’ve structured this trade in OptionsPlay so you can analyze and view this trade along with the supporting technical chart at your convenience. You can also view the Options Action’s video by clicking on the following link: JPM OptionsAction Trade
Trade Earnings with Limited Risk using Options – Oct 17th @ 4:15 PM EST – Register Now