$JPM calls triple in two days

Option traders rode the bullish momentum in JP Morgan (JPM) to more gains today following the bank’s quarterly results.

On Oct. 15, Market Rebellion’s proprietary programs flagged the purchase of 45,000 October $121 calls for $0.30 to $0.36 with shares at $118.78. This was clearly fresh buying, as volume was far above the strike’s previous open interest of 2,271 contracts.

Those calls traded for as much as $0.90 today, 3 times their initial purchase price. The stock rose 2.33% in the same time frame, illustrating how quickly options can far outperform their underlying calls.

Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall.

JPM reached $121.57 this morning before pulling back to $120.37 this afternoon, still up 0.57% on the session. The bank topped earnings and revenue estimates Tuesday morning.