$TGT bulls hit the mark again

Bullish option traders have hit the mark again on upside option positions in Target (TGT) today.

Back on July 9, Market Rebellion’s Unusual Option Activity Service identified the purchase of 5,965 January $92.50 calls as part of a bullish roll from an existing winning position for $4.57 with shares at $88.86. The volume was below open interest of 8,463 contracts at the time but appeared to add to an existing identified trade. Market Rebellion co-founder Pete Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls traded for as much as $32.67 thus far today, more than 7 times their purchase price. The stock rose 40.42% at the same time, showing how quickly options can far outperform their underlying shares.

It is the second winning trade in the contract posted on Market Rebellion.

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 12.56% to $124.80, the retail chain topped third-quarter estimates on earnings, revenue, and raised fiscal year guidance during the pre-market.