JPMorgan Chase (JPM) is selling off today following a mixed earnings report, which is precisely why I didn’t want to hold through the announcement.
Q1 revenue was down 5% year over year, while profits fell 42%. The main culprits were increased costs from bad loans and market volatility caused by Russia’s invasion of Ukraine. However, both the top and bottom line came in above analysts’ estimates, helped by strong trading results.
We closed our previous JPM put and bull put spread at a loss to avoid earnings, which means we currently have a net debit on the positions. Let’s take advantage of the post-earnings volatility to reenter the positions. The income we generate will reduce our net debts.
You can enter a trade today even if you were not in a previous one. Just be aware that we will be managing and tracking them as ongoing positions.
Note that I do not recommend doubling up. Choose the strategy that best suits your trading goals and risk tolerance. And if you are new to spread trading, please watch my Bull Put Spread Coaching Session before entering a spread trade.
Current Stock Price: $127.32
Net Debit: $0.92
Action: Sell to open the JPM Apr Week Four (4/22) 120 Put for around $0.42, but adjust as needed to sell a put today
New Net Debit: $0.50
JPM Bull Put Spread
Net Debit: $0.12
- Sell to open the JPM Apr Week Five (4/29) 120 Put for around $0.88
- Buy to open the JPM Apr Week Five (4/29) 115 Put for around $0.38
- Set initial credit limit at $0.50, but adjust as needed to enter today
Cash in Hand: $0.38