Bulls shop at TJX before monthly sales
David Russell | firstname.lastname@example.org
optionMONSTER's tracking programs detected the purchase of about 6,300 November 42.50 calls yesterday, most of which priced or $0.55 to $0.75. The volume was above the open interest of 4,846 contracts when the session began, so yesterday's trades were initiating new positions.
Those call buyers have locked in a $42.50 entry price on the discount retailer through expiration on Nov. 16. The calls can generate leverage in the event of a rally but will expire worthless if the stock fails to climb. (See our Education section)
TJX ended the session higher by 2.21 percent to $41.63. The stock was around $41 when most of the calls were bought, and that $0.60 gain into the close inflated the option premiums to $0.95 and $1 late in the afternoon.
The company has repeatedly issued strong sales and earnings, but shares hve pulled back to their 200-day moving average. That could be leading some buyers to step in ahead of today's October sales data.
Total option volume was triple the daily average, with calls outnumbering puts by almost 5 to 1.
(A version of this post appeared on InsideOptions Pro yesterday.)