Bulls Shop at TJX Ahead of Monthly Sales

By David Russell, reporter at OptionMonster

NEW YORK -- TJX ( TJX) reports same-store sales Thursday morning, but the bulls got their shopping done early.

OptionMonster's tracking systems detected the purchase of about 6,300 November 42.50 calls Wednesday, most of which priced for 55 cents to 75 cents. The volume was above the open interest of 4,846 contracts when the session began, so Wednesday's trades were initiating new positions.

Those investors have now 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.

TJX ended the session higher by 2.21% to $41.63. The stock was around $41 when most of the calls were bought, and that 60-cent gain into the close inflated the option premiums to 95 cents and $1 late in the afternoon.

The company has repeatedly issued strong sales and earnings, but shares have 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.

Russell has no positions in TJX.
This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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