Options News
Traders hit bull’s eye in $TGT
Target reported strong quarterly results this morning, yielding large profits on upside option positions. On Jan. 25, Investitute’s tracking systems detected the purchase of 7,700 March $72.50 calls mostly in one print of 6,800 for $2.55 as part of a bullish spread with shares at $71.83. This was clearly a new position, as volume was […]
Target reported strong quarterly results this morning, yielding large profits on upside option positions.
On Jan. 25, Investitute’s tracking systems detected the purchase of 7,700 March $72.50 calls mostly in one print of 6,800 for $2.55 as part of a bullish spread with shares at $71.83. This was clearly a new position, as volume was above the strike’s previous open interest of 4,558 contracts.
Those calls traded as much as for $4.65 today, nearly double their purchase price. The stock rose 0.62.8% in the same time frame, illustrating the kind of leverage that can be achieved with options.
Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.
TGT was up 4.58% to $76. today. The discount retailer issued a positive outlook after topping earnings and sales expectations this morning.