Options Trading News

October 12, 2012  Fri 9:31 AM CT

Shares of TJX are showing weakness today, but a huge option trade today may not be bearish.

TJX is down 1.5 percent this morning to $43.23, the discount retailer's lowest level since the start of July. Shares had been steadily trending higher since 2009, starting 2010 just below $18 and hitting a high of $46.67 at the end of August of this year.

More than 54,000 TJX options have traded so far, compared to a daily average of 5,800. Less than 700 of the volume is in the calls, and one large put trade dominates the action.

Our systems show that a trader bought 25,769 October 45 puts for $1.59 against open interest of more than 30,000. At the same time, he or she sold the same number of the November 45 puts for $2.16 at more than 10 times the previous open interest.

The October options only have a week left until expiration, and anyone short those puts do face assignment as they are in the money. So this appears to be a roll of the short put position out in time. The trader is looking for TJX to be above $45 but still range-bound.
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