Unusual Options Activity: Target Corporation (TGT)

Shares of big-box retailer Target Corporation (TGT) have rallied in the prior weeks. Yesterday, the company reported a strong holiday season with double-digit same-store sales. One trader sees shares moving even higher.

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  • That’s based on the July 2021 $230 call options. With shares around $197, it would mean a further 17 percent rally in shares in the next 183 days. Over 2,100 contracts traded against a prior open interest of 147, for a 20-fold rise in volume.

    The option buyer paid about $5.85 for each of the options.

    Shares of the stock have more than doubled off their March lows already, and the past few weeks has seen shares rally more than 10 percent.

    Action to take: In the very short-term, shares look a little overbought following their big move higher. However, the option with its June strike date is likely to see further advances along with the price of shares.

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  • Traders should follow along the with the trade, given the reasonable price and how long the trade has to play out. Traders who buy multiple contracts can likely take some profits off the table when the company does report earnings, as shares will likely see a big move higher on that news.

    It’s possible that shares move in-the-money, but traders should look to be out of the trade before the time premium starts to work against it in the final weeks of the option.