Options Traders Blast Target Stock After Earnings

The retailer reported better-than-expected fourth-quarter earnings

Assistant Editor
Mar 2, 2021 at 10:41 AM
facebook twitter linkedin


The shares of Target Corporation (NYSE:TGT) are down 2% at $182.36 at last check, despite the retail giant reporting an upbeat fourth-quarter report, as well as a rise in sales. Holiday shopping gave the popular retail chain's sales a boost, and increased in-store sales in January. Target also announced plans to remodel its stores and open 30-40 new stores each year in urban centers, college campuses, and dense suburban cities. 

For the last 12 months, Target stock has carved out a channel of higher highs, culminating in a Jan. 13 all-time high of $199.96. However, today's drop has TGT in danger of breaching its 60-day moving average on a closing basis, a trendline that contained November and January pullbacks.

TGT's options pits are buzzing with action this morning. So far today, 48,000 calls and 23,000 puts have crossed the tape -- eight times what's typically seen at this point. The weekly 3/05 200-strike call is the most popular, where new positions are being opened. This means plenty of options traders are betting on increased upside for Target stock by the end of the week. Longer term, the April 200 call is seeing notable attention as well.

The penchant for calls is nothing new, though. The equity's Schaeffer's put/call open interest ratio (SOIR) of 0.43 ranks at the 10th percentile of its annual range. This means short-term option players have rarely been more call-heavy during the past 12 months.

 

Celebrate 40 Years of Schaeffer's With 4 FREE Stock Picks!


 




 
Special Offers from Schaeffer's Trading Partners