$TGT bulls continue to hit the mark

Bullish option traders continued to hit the mark in Target (TGT) today.

Back on July 1, Our tracking systems found that 6,000 January $92.50 calls were purchased as part of a bullish roll from an existing winning position for $4.30 with shares at $87.66. Volume was well above the strike’s previous open interest of 493 contracts, indicating that this was fresh buying.

Those calls traded for as much as $15.44 thus far today, about 3.5 times their purchase price. The stock rose 19.7% at the same time, showing how quickly options can far outperform their underlying shares.

Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall.

TGT has jumped this morning by 1.75% to $104.80, a second day of making a new all-time high following Weekly upside activity ahead of its earnings report yesterday, where the retail chain topped second-quarter estimates on earnings, revenue, and raised guidance during the pre-market.