JPMorgan Chase is a highly rated stock and is one of the best-performing bank companies of 2025. Investors who think JP Morgan will continue to rally and don't want to risk significant capital can use long call options, rather than buy the stock outright.
This can be a good way to protect precious capital in these volatile markets.
A call option is a contract between a buyer and seller. The contract gives the buyer the right to purchase a stock at a certain level — the strike price. That's allowed up until a certain deadline, or the expiration date.
One of the benefits of call options is that they provide leverage. This can be both a good and a bad thing.
Assuming an investor wanted to buy 100 shares of JP Morgan stock, they would have to invest around $29,700 at the current price. With a call option, the investor could gain a similar exposure using a fraction of the capital. One call option gives the investor exposure to 100 shares.
One-Sixth Of The Investment
If an investor were to buy one JP Morgan strike call option at 270 with a June 18, 2026, expiration, they would only need to invest around $4,600 rather than $29,700, or less than one-sixth the investment.
The break-even price for this call option is equal to the strike price plus the premium paid, or 316. Further, the most the trade can lose is the $4,600 premium, which occurs if JP Morgan finishes below 270 on June 18 next year. However, if JP Morgan stock shoots higher, the upside is unlimited.
Using options in this manner can be a great way to gain exposure to a stock without risking as much capital via buying the stock outright.
Savvy traders can further reduce the risk by selling an out-of-the-money call, or turning the trade into a bull call spread. For example, selling a June 18, 2026, strike call at 340 would reduce the trade cost by around $1,200. But it also limits the upside above 340.
A stop-loss could be set if JP Morgan drops 8% from the entry point.
JP Morgan Stock: Market Cap Of $824 Billion
With a market cap exceeding $824 billion, JP Morgan remains the largest U.S. bank, and a bellwether for the financial sector.
According to IBD Stock Checkup from Investor's Business Daily, JP Morgan stock ranks No. 6 in its group. It also has a Composite Rating of 93, an Earnings Per Share Rating of 90 and a Relative Strength Rating of 85.
JP Morgan trades at a price-to-earnings ratio of 15.2, suggesting reasonable valuation for a large-cap financial stock.
It's important to remember that options are risky and investors can lose 100% of their investment.
Gavin McMaster is founder and operator of Options Trading IQ, a website offering instruction on how to buy and sell options. Follow him on X/Twitter at @OptiontradinIQ.
