JPMorgan Helps Us Uncover Goldman Sachs Trade
Oftentimes, it pays to watch the day-to-day trading actions of “Sharp Paper” traders.
That’s what I call big money traders who are willing to commit large amounts of capital playing directional calls or puts.
For instance, here’s a hypothetical…
Say a trade crosses the tape showing someone just bought 500 calls on Home Depot for $700,000 just before its earnings report.
Is this something you’d pay attention to?
Heck yeah it would be!
Does this Sharp Paper buyer have inside information?
Do they know that Home Depot is about to make a big upside move?
Who knows? Anything’s possible…
I’m certainly willing to take a very close look at someone putting three-quarters of a million on the line for a single trade. With that sort of conviction, I’m more than happy to tag along.
Do Sharp Paper traders always get it right?
Of course not.
They’re human, just like everyone else…
However, every once in a while, they hit on returns that are truly spectacular. And these are the winners that make this methodology worth pursuing.
This leads into a Sharp Paper trade I noticed this afternoon…
Earlier today, a rather large bullish call order came across the tape on JPMorgan Chase & Co. Specifically, someone bought 1,268 of the JPMorgan November $120 calls for $5.35. In total, it was a $678,380 order.
So of course I looked at JPMorgan’s chart. And honestly, it looks overbought. JPMorgan just blasted through resistance at $120 – and then extended up to $124. That’s quite a run. I’m not so sure I’d be comfortable buying more than half a million dollars’ worth of calls at these levels.
However, this big JPMorgan buyer prompted me to look at some other financial charts…
Lo and behold, Goldman Sachs (NYSE: GS) looks a lot better.
Action Plan: If Goldman Sachs follows in the same path as fellow financial leader JPMorgan, shares will break above the $220 level and extend to new highs. In The War Room, we outlined this exact strategy – and gave our traders the precise parameters for an entry price on Goldman Sachs. If you’d like in on this trade, you’re invited to join me in The War Room today!
About Bryan Bottarelli
Bryan graduated with a business degree from the highly rated Indiana University Kelley School of Business, and his first job out of college was trading stock options on the floor of the Chicago Board Options Exchange. He was mentored by some of the country’s top floor traders in the heart of the technology boom from 1999 to 2000, where he learned to identify and implement some of his most powerful trading secrets. Now he shares his secrets with a group of elite traders. We will be republishing some of his highly sought after content from his free e-letter, Trade of the Day.