The TJX Companies, Inc. (NYSE:TJX - 45.20) was the target of heavy option activity during yesterday's session, with put volume rising to more than 23 times the expected level. During the course of the session, roughly 55,000 puts crossed the tape, compared to only 929 calls.

Wednesday's preference for puts appears to be the norm in the options arena. For starters, TJX's Schaeffer's put/call open interest ratio (SOIR) of 3.12 shows that call open interest more than triples put open interest among options set to expire within three months. Plus, over the past 10 trading sessions, investors on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open 3.07 puts for every call. Both the SOIR and the ISE/CBOE/PHLX put/call volume ratio are closing in on 12-month highs, signaling that traders have become more put-heavy than usual toward TJX.

When studying TJX's technical backdrop, however, it's difficult to see why options speculators have such an taste for these bearish bets. The shares have rallied roughly 40% since the beginning of the year, and ran to an all-time best of $46.67 on Aug. 29. In fact, since that new top, the equity appears to have found support in the $45-$46 area.

As TJX continues to trade at this record-high level, one player yesterday decided to extend his moderately bullish outlook by rolling out his front-month short put contracts. Specifically, several large blocks of September 45 puts crossed the tape at the ask price, while symmetrical blocks of October 45 puts changed hands at the bid price. With open interest decreasing at the September series, and increasing at the October series, it can be assumed that these positions were respectively bought to close and sold to open.

By pushing this position out, the put seller predicts that TJX can find a foothold atop $45 by the time the contracts expire in October. Should this strategy prove successful, the puts will expire worthless, and the writer can pocket the initial premium received from the sale -- which represents the maximum potential reward on the play. As previously mentioned, the $45 mark has acted as a technical backstop for more than a month, and could continue to act as support should the bearish holdouts succumb to TJX's overall upswing.

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