Schaeffer's Top Stock Picks for '25

Options Traders Seek Target Calls as Online Sales Surge

Target calls are more popular than puts today

Digital Content Manager
Nov 29, 2019 at 10:48 AM
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With the Black Friday holiday shopping event underway, Target Corporation (NYSE:TGT) is no doubt seeing a boom in store sales today. However, with more of these sales moving online, the big box retailer said it plans to kick off its Cyber Week sales event one day early this year, starting on this Sunday, Dec. 1, instead of Monday -- when the event typically starts. This move may be sparked by the massive pop in online sales this year, with a report from Adobe showing that e-commerce revenue during Thanksgiving increased by nearly 19% from last year.

The shares of Target are 0.2% higher at $126.11, up 90.8% on the year, thanks in part to last week's post-earnings bull gap. Now, the equity is consolidating just south of its Nov. 21 all-time-high, and looking to clock a nearly 18% gain for the month -- its biggest one-month percentage pop since August. 

Looking at how Target has fared the week after Black Friday, the stock could move either way. Data from Schaeffer's Senior Quantitative Analyst Rocky White shows Target has finished this week higher half the time over the past 10 years, averaging a 1.1% gain. 

Calls are popular today, with 8,887 of these contracts across the tape so far -- about four times the number of puts. Some selling action is being detected at the weekly 12/6 127-strike call. The weekly 11/29 127-strike call, which expires at 1 p.m. ET today, when markets close early, is most active, with contracts being purchased here. 

That being said, options might be a good idea for anyone looking to invest in TGT's next move. The security's Schaeffer's Volatility Index (SVI) of 20% sits in the 8th percentile of its annual range. This means short-term options are pricing in extremely low volatility expectations right now. 

 
 

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