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Scott Bauer of Trading Advantage shared with the viewers of
Bloomberg Markets his options strategy in
JPMorgan Chase & Co.JPM ahead of the earnings report.
The company is going to report earnings on January 14 and Bauer thinks that there is not a lot of downside for the stock at the moment. Ha also thinks that
JPMorgan Chase & Co. won't have blow out earnings on the upside.
Bauer wants to sell the next week's 57.5 put and 59 call for a total premium of $2. He explained that the break even for the trade on the downside is at $55.5 and on the upside at $61. Below $55.5 and above $61 the trade starts to make losses, while his maximal profit is the collected premium of $2. Bauer added that he would be more than happy to buy
JPMorgan Chase & Co. at $55.5 and he believes that $61 should be a very strong resistance.
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