* Contrarian bullish option plays pop up across banks
* Call volume in certain banks is above pace into holiday
* Top trades in Financial ETF appear to be bearish plays
Nov 23 (Reuters) - Option traders appear to be betting on a rebound in the shares of big banks whose fortunes have been driven down by growing pessimism over the euro zone's ability to resolve its debt problems.
Sizable activity in upside call options in the December contracts on JPMorgan & Chase Co , Citigroup Inc Barclays PLC , Goldman Sachs Group and Morgan Stanley suggest an imminent reversal in their battered shares.
"Today's call buying in these stocks seems to be a contrary play and reflect expectations for a rebound in the shares before the December expiration in 23 days," said Frederic Ruffy, options strategist at Web site WhatsTrading.com.
Bank stocks took a nose-dive on Wednesday on concerns about the European debt crisis and rigorous stress tests of six large U.S. bank announced by the Federal Reserve on Tuesday, analysts said.
"With such fragile sentiment already in place ahead of the long holiday weekend, investors sold indiscriminately in the financial sector, providing opportunities for contrarian option plays across certain banks," said Andrew Wilkinson, chief economic strategist at Miller Tabak and Co in New York.
While a number of individual stocks in the financial space attracted unusual upside call activity, the top trades in the Financial Select Sector SPDR fund appeared to be bearish plays, Ruffy said.
The XLF dropped 2.9 percent to $11.73 on Wednesday. Traders exchanged about 1.24 million options in the XLF, 2.9 times the average daily levels, as puts outpaced calls by a factor of 2.89:1, according to options analytics firm Trade Alert.
"The contrarian positioning in some big banks argues against today's conventional wisdom that European woes will drag down the financial sector," Wilkinson said.
The pattern was evident in several large banks when fresh positions were tracked in out-of-the-money December calls or those options with strike prices above the share value.
For example, one player bought 71,000 December $34 calls on JPMorgan for an average price of 13.5 cents per contract, Ruffy said. JPMorgan shares fell 3.50 percent to $28.38.
The volume in that strike exceeded the 11,015 in open positions, data from option analytics firm Trade Alert showed.
The massive premium purchase was similar to a trade in Citigroup, where Ruffy said 50,000 December $29 calls were bought for 23 cents apiece against 22,015 open contracts.
Citi shares were down 3.88 percent to $23.51.
Seemingly bullish call buying on British bank Barclays emerged in contrast to a 3.85 percent drop in the bank's U.S.-listed shares to $9.24.
More than 30,000 calls changed hands at the December $12 strike in Barclays against open interest of 3,863 contracts.
It appeared an investor bought most of the calls, outright, at a premium of 15 cents apiece and is poised to profit at expiration if shares surpass the break-even price of $12.15, said Interactive Brokers Group options analyst Caitlin Duffy.
Goldman shares ended 1.68 percent lower to $87.89 and the top options trade in the investment bank was 10,000 December $110 calls bought as an opening position for 30 cents against 5,340 in open interest, according to Ruffy.
Impressive call buying spilled over to Morgan Stanley where a buyer paid 22 cents for 22,407 December $16 calls to open a new position when shares were trading near $13.15, said Trade Alert president Henry Schwartz. The stock dipped 3.62 percent to $13.03.
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