JPMorgan Chase (JPM) is one the largest and most diversified banks in the U.S. and offers services such as retail banking, commercial banking, asset management, investment banking, consumer lending and credit cards. Its main competitors include Bank of America (BAC), Wells Fargo (WFC), Goldman Sachs (GS), Deutsche Bank (DB) and Morgan Stanley (MS).

We have a price estimate of $48.87 for JPMorgan's stock, roughly 5% above the current market price.

JPMorgan (JPM) overall option implied volatility of 26 is below its 26-week average of 32, according to Track Data, suggesting decreasing price movement.

Cisco (CSCO) overall option implied volatility is at 28, according to Track Data, near its 26-week average into its release of Q2 EPS on February 9, suggesting nondirectional price movement.

Options Update is by Stock Specialist Paul Foster of theflyonthewall.com.

JPMorgan Chase (JPM - option chain) stock is trading lower today after reports have surfaced that senior executives at the bank expressed doubts about the returns of Bernard Madoff's investment business as early as June 2007, 18 months before Madoff's Ponzi scheme collapsed. An internal e-mail from a high-level risk management officer within JPM reported that another bank executive "just told me that there is a well-known cloud over the head of Madoff and that his returns are speculated to be part of a Ponzi scheme." Despite the suspicions, JPM continued to allow Madoff to move billions of dollars of his investors' cash in and out of his Chase bank accounts until he was arrested for the Ponzi scheme in December 2008. If you think this cloud of suspicion could keep a cap on JPM's stock price in the coming months, then it could be a good time to look at a bearish hedged play on JPM.

This morning, JPM opened at $45.00. So far today the stock has hit a high of $45.17 and a low of $44.50. As of 12:20, JPM is trading at $44.65, down $0.81 (-1.7%). The chart for JPM looks bullish and S&P gives JPM a positive 4 STARS (out of 5) buy ranking.

Is Federal Reserve Chairman Ben Bernanke stoking inflation? Of course he is. Anyone with common sense knows that if you give $600 billion cash to the banks with no qualifications -- as he did with the second round of quantitative easing -- they will use it to speculate in the markets. JPMorgan Chase (JPM) just bought $1 billion of copper.

Bernanke's fatal mistake was that he placed no restrictions on what the banks would do with his $600 billion. If you opened the banks' books, you can bet that they've invested in commodities, currencies and foreign equities and bonds.

Bank earnings are coming in mixed. A few days ago, JPMorgan Chase (JPM) reported its profit was up 47%. Then, Goldman Sachs (GS) reported earnings were down 52%. And on Wednesday, we got a stellar performance by Morgan Stanley (MS).

The Wall Street Journal reports that Morgan Stanley's profits were up 35% to $867 million, up from $460 million a year ago. Earnings jumped to 41 cents per share from 29 cents per share. Net revenue jumped 14% to $7.81 billion. Analysts at Thomson Reuters had forecast earnings of 35 cents a share on $7.35 billion.

The earnings season ramps up this week. Analysts polled by Thomson Reuters foresee strong reports from such big names as Apple (AAPL), eBay (EBAY), IBM (IBM), General Electric (GE), Google (GOOG), Schlumberger (SLB) and Southwest Airlines (LUV). And fast on the heels of last week's big earnings beat from JPMorgan Chase (JPM), there will be plenty more results from the financial sector to peruse this week.

Among the financials expected to post double-digit earnings growth this week are Capital One Financial (COF), Morgan Stanley (MS), SLM Corp. (SLM) and U.S. Bancorp (USB), but the week's biggest earnings winner may be Wells Fargo (WFC).

The Wall Street Journal reported that JPMorgan Chase's (JPM) Q4 profit was up 47% in the fourth quarter. Earnings came in at $4.83 billion, or $1.12 per share, up from $3.28 billion or 74 cents a share a year ago. Revenue on a managed basis increased 5.9% or $26.72 billion. Thomson Reuters had forecast $24.37 billion in revenue.

This report is not surprising when you consider that the Fed is buying $600 billion in treasuries. When the Fed buys securities from banks it credits their balance sheets. So, right now, banks are swimming in cash.

Alcoa (AA), Intel (INTC) and JPMorgan Chase (JPM) will kick off a new earnings season this week when they report their results for the fourth quarter of 2010. Here's a quick look at what analysts surveyed by Thomson Reuters expect to see, followed by a glance at what's coming up on the economic calendar.

Alcoa

During its fourth quarter, Alcoa saw increased demand in emerging markets, sold surplus properties, and shared revenue targets with investors. Analysts forecast that earnings for the period will come to 19 cents per share, up from just a penny per share in the same quarter of last year. The New York-based aluminum producer also is expected to post revenue of $5.7 billion for the three months that ended in December, which is 4.5% more than a year earlier.

Financial firm JPMorgan Chase (JPM) released its much-anticipated third-quarter earnings Wednesday morning, revealing that its profit increased 23%. JPM earned $4.42 billion, or $1.01 per share, during the quarter -- far better than the $3.59 billion, or 82 cents per share, earned a year ago. Not only did JPM destroy last year's earnings, but the company also handily topped the consensus estimate of 90 cents per share.

One reason for the stronger-than-expected results is the fact that JPM set aside $1.55 billion for retail credit losses in the quarter compared to $3.99 billion a year ago. That said, CEO Jamie Dimon warned that loan losses are still high in the mortgage and credit card portfolios, but these losses aren't continuing to rise as they did during the recession. Dimon added that JPM is expecting losses in the credit-card division during the next quarter.

The earnings season kicked off last week with better-than-expected results from Alcoa (AA) and Yum! Brands (YUM), while Marriott (MAR) and Pepsico (PEP) met consensus EPS estimates. This week, bellwether companies Intel (INTC), General Electric (GE), Google (GOOG) and JPMorgan Chase (JPM) are scheduled to report their third-quarter results, and analysts polled by Thomson Reuters are looking for earnings growth from all of them.

Santa Clara, Calif.-based Intel announced the acquisition of McAfee and joint ventures with General Electric and Nokia (NOK) during its third quarter. Analysts forecast earnings for that period to come to 50 cents per share, which is up 34.0% from the same period of last year. The number one semiconductor maker's revenue for the three months ended in September is expected to total $11.0 billion, or 17.1% more than a year earlier. Looking ahead to the full year, the forecast thus far is for earnings of $1.94 per share (+44.8%) and $43.3 billion in revenue (+23.4%). The per-share earnings topped analysts' expectations in the past four quarters, by as much as a dime per share.

Yup. You've read it right. A JPMorgan trader lost $130 million trading coal. You are probably wondering why a bank like JPMorgan Chase (JPM) is trading coal. That's a good question. But the answer is that banks love to gamble with your money. They gamble every day in the commodity markets.

The new Volcker rule is designed to prevent banks from gambling in the commodity markets, or any other markets for that matter. Most banks have spun off their proprietary trading units. Goldman Sachs (GS) plans to do so. We have not read about JPMorgan yet. This should get the attention of board members, who should tell CEO Jamie Dimon to get cracking and spin off their proprietary trading unit.

As Wall Street watches to see which direction the S&P 500 is going to go this week, investors in Bank of America (BAC) have already made their decision. They are sending the stock south.

Bank of America gapped down after its earnings announcement on Friday, July 16, and it is continuing to move lower this week. In fact, the stock is at its lowest level since July 2009.

If you are getting nervous about Bank of America, you are not alone. Goldman Sachs announced today that it is removing the stock from its Conviction Buy List -- citing the bank's announcement that its debit interchange fees could fall by as much as 80%. Goldman went on to say that JPMorgan Chase (JPM) looks like a better bet than Bank of America.

The new earnings season kicks off when Alcoa Inc. (AA) releases its second-quarter results Monday. Analysts surveyed by Thomson Reuters on average expect Alcoa to report that it swung to a profit from a year-ago net loss.

Intel Corp. (INTC) is likewise forecast to have swung into positive territory, while Google Inc. (GOOG) and JPMorgan Chase & Co. (JPM) are expected to be among the week's biggest earnings gainers.

The U.S. stock market is closed in observance of Independence day, which gives us a great opportunity to examine a few stocks with ties to the 4th of July.

This first of this three-part series will start by comparing investment opportunities in the United States -- home of the authors of the Declaration of Independence -- with those across the pond in the United Kingdom -- whose monarch was the recipient of that declaration. Then we'll then take a look at a few of the stocks that help us maintain our freedom as we dive into the U.S. defense industry. Finally, we'll take a look at stocks that benefit from the partying and picnicking that are so much a part of any 4th of July celebration.

The long awaited Initial Public Offering (IPO) of Tesla Motors (TSLA) stock hit the market at $17.00 a share and it is up in a down market, trading between $18 and $19 throughout Tuesday morning.

I say stay away. First and foremost, investors should take note of the fact that most IPO's end up as losing propositions. In the case of Tesla, which lost over $55.7 million last year and will lose more this year, the bleeding has just begun.

The car manufacturing business is very capital intensive and Tesla only hopes to stem the tide in 2012 when it projects a production run of 20,000 Model S all electric sedans for $50,000 each.