We are seeing unusual activity in the January 2011 call options in JP Morgan Chase & Co. (JPM), likely as a result of today’s story that JPM has requested that the U.S. Treasury auction off the government-controlled 10-year warrants that were tied to the original TARP payment. If these warrants are available to the marketplace, this creates a huge supply of long-dated options. Potential buyers may be selling the longest-dated listed option as a hedge.
My sources are showing me offers and trades of more than 25,000 contracts in the Jan 2011 50 calls, the 45 calls and the 40-strike calls.
–Steve Claussen
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