Options Radar: Carnival Corporation, Herbalife Ltd., and TJX Companies

Reviewing notable options activity on Carnival Corporation, Herbalife Ltd., and TJX Companies Inc

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Published on Nov 14, 2014 at 12:35 PM
Updated on Apr 20, 2015 at 5:32 PM

Three stocks seeing notable options activity today are cruise ship operator Carnival Corporation (NYSE:CCL), nutritional supplements marketer Herbalife Ltd. (NYSE:HLF), and discount retailer TJX Companies Inc (NYSE:TJX). Here's a look at how today's options traders have been placing their bets on these three names.

  • Carnival Corporation (NYSE:CCL) isn't doing much on the charts today -- up 0.4% at $41.07 -- but its options pits are moving. Specifically, 11,000 calls are on the tape -- nine times what's expected at this point in the session -- dwarfing the 100 puts currently traded. Meanwhile, CCL's 30-day at-the-money (ATM) implied volatility (IV) has popped 5.1% to 26.6%, signaling elevated demand for short-term strikes. Most active is the December 43 call, as bullish traders roll the dice on extended gains through the close on Friday, Dec. 19 -- when back-month options expire.

  • Herbalife Ltd. (NYSE:HLF) is down 1% around midday at $37.46, amid news that an executive has been charged in a Brazilian embezzlement case. In the stock's options pits, puts are flying off the shelves at more than double the usual intraday rate. The most active HLF options are the January 2015 30- and 35-strike puts, where more than 18,000 total contracts have changed hands. According to Trade-Alert, the higher-strike puts are being bought to open while twice as many of the lower-strike puts are being sold to open, as one speculator employs a put ratio spread in the hopes of additional downside through January options expiration. Longer term, shares of HLF have already lost more than half of their value in 2014, and are currently approaching a fresh annual low of $36.97, touched on Wednesday.

  • TJX Companies Inc (NYSE:TJX) has slipped 2.1% to $62.15 this afternoon, after Canaccord Genuity downgraded the stock to "sell" from "hold" -- citing lofty expectations for the company's upcoming earnings report -- but lifted its price target to $58 from $54. Stifel Nicolaus, however, forecast "solid results" for the retailer. Meanwhile, TJX options are trading at 11 times the usual intraday clip, and the security's 30-day ATM IV is 6.3% higher at 28.6%, suggesting short-term strikes are in demand. Digging deeper, however, it appears slightly longer-term speculators are buying to open TJX's January 2015 65-strike calls, confident the shares can rebound by early next year. In fact, a move north of $65 would represent a new record high for the stock, which topped out at $64.82 earlier this month. One potential catalyst for such an advance is the company's previously mentioned third-quarter earnings report, due out next Tuesday morning.

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