OptionsHouse

Options Trading News

February 19, 2013  Tue 3:47 AM CT

TJX: SEE CHART GET CHAIN FIND STRATEGIES
After years of alpha, one investor apparently thinks that the limelight is fading for TJX.

Riding a wave of frugality that swept the nation after the 2008 market crash, the discount retailer consistently outperformed the broader market between early 2009 and mid-2012. It more than quadrupled over that time, while the S&P 500 appreciated 56 percent. But in the last six months it's gone nowhere while other stocks have continued to advance.

Friday's big option trade is looking for that lackluster performance to continue. An investor sold about 28,000 March 45 calls for $1.05, while buying a similar number of February 45 calls for $0.25. Volume was below open interest in the February contracts, which suggests that an existing short position was rolled forward in time.

He or she apparently thinks TJX will remain at or below $45 and has likely been selling calls at that level to earn income while holding a long stock position. The trade was giant in size--pushing total option volume to 21 times greater than average--and marks a huge sentiment shift in a stock that once could do no wrong in the eyes of investors. (See our Education section)

Our proprietary researchLAB analysis tool shows a similar pattern in other discount retailers, which have badly lagged the S&P 500 over the last three months. At the same time, leadership has shifted to energy, financials and global equities.

TJX closed at $45.01 on Friday, down 0.44 percent.
Share this article with your friends


Related Stories

TJX

TJX seen holding firm after earnings

July 16, 2015

The discount retailer has yielded several winning trades this year, and put sellers are betting that the it will hold its ground through quarterly results next month.

TJX

TJX gets big vote of confidence

June 30, 2015

The discount retailer bounced off its 200-day moving average earlier this month but pulled back with the rest of the market yesterday.

OptionsHouse

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Archived Webinar

Education & Strategy

Options Academy: At the Break

So far, my articles have taken you through a logical progression of option theory and fundamental concepts of options. As of yet, I have not mentioned a single strategy and for a good reason! The actual application of a strategy should come AFTER you learn about the option product itself.

View more education articles »