JP Morgan calls post 1,000% gain

Bullish option traders turned enormous profits in JP Morgan just two days after opening their positions.

On Wednesday, Investitute’s scanning systems showed that 1,200 Weekly $91 calls that expired this afternoon were purchased for $0.07 to $0.09 with shares at $88.97. Volume was double the strike’s open interest, indicating that this was fresh buying.

Those calls sold for $1 a minute after today’s opening bell, a profit of more than 1,100 percent. The stock was pu less than 4 percent at the same time, underscoring how quickly the performance in options can dwarf that of their underlying shares.

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 was up 0.27 percent to $91.40 today. After passing the Federal Reserve’s so-called stress test, the banking giant said last night that it would buy back $19.4 billion of its shares.