Target Options See Volume Climb as Earnings Beat Boosts Stock's Appeal
$Target (TGT.US)$ 's earnings beat sent the stock's historical volatility to this year's high, boosting the appeal of its options to speculators and investors seeking to gain from wild price swings.
Call options that give the holders the right to buy Target shares at $170 by the end of this week saw volume almost quadrupling to 17,630 by 2:30 p.m. Wednesday in New York as the stock climbed near that strike price before paring its gains. That made the calls the most active options linked to the retailer across 17 expiration dates stretching through Dec. 18, 2026, according to data tracked by moomoo.
Target shares started the trading day up by 17% at $167.33 after the retailer's second quarter earnings beat estimates by 18%, helped by increasing store traffic and rising digital comparable sales. The excitement in the stock market spilled into the options market, sending the price of the $170 calls to as high as $3.20.
As technical indicators started flashing warning signals that the stock could be overbought, Target trimmed its gains to 12% at about $161, pushing the $170 calls out-of-the-money. The price of those calls swung to as low as 12 cents before regaining some ground. The shift from in-the-money to out-of-the-money sent the volume on those calls climbing to more than quadruple the open interest of 3,420.
While the stock rally could be running into resistance, capital trend data tracked by moomoo shows
Target continues to draw investors. Fund inflows outpaced outflows by $59.3 million, data showed. That trimmed the fifth monthly net outflow to $109.4 million.
Target continues to draw investors. Fund inflows outpaced outflows by $59.3 million, data showed. That trimmed the fifth monthly net outflow to $109.4 million.
Target's gross margin rose to 28.9% in the three months that ended Aug. 3, from 27% a year earlier. That surpassed analysts' consensus by 3.2%, according to estimates compiled by Bloomberg. Adjusted earnings climbed 42% to $2.57 a share for the quarter, exceeding Wall Street expectations that called for $2.18 a share.
Better-than-expected margins and earnings bolstered confidence that the company can go back to earnings before interest and taxes (EBIT) margin of more than 6%, Truist analyst Scot Ciccarelli said, according to a Bloomberg report. Meanwhile, Baird analyst Peter Benedict, who has an outperform rating on the stock, said he expects Tesla shares to respond favorably, the report showed.
In total, about 285,350 Target put and call options were traded so far, landing it in the seventh spot for the stock options with the biggest volumes, behind $NVIDIA (NVDA.US)$, $Tesla (TSLA.US)$, $Amazon (AMZN.US)$, $Apple (AAPL.US)$, $Meta Platforms (META.US)$, and $Advanced Micro Devices (AMD.US)$. (To see the options ranking, click here.)
Share your thoughts on Target below and if you have a price forecast, please vote below.
Disclaimer: This presentation is for informational and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Indexes are unmanaged and cannot be directly invested in. Past performance is no indication of future results. Investing involves risk and the potential to lose principal. Investment information provided in this content is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors. It is provided without respect to individual investors’ financial sophistication, financial situation, investment objectives, investing time horizon, or risk tolerance. You should consider the appropriateness of this information regarding your relevant personal circumstances before making any investment decisions. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. Moomoo makes no representation or warranty regarding its adequacy, completeness, accuracy, or timeliness for any purpose of the above content. See this link for more information.
Options trading entails significant risk and is not appropriate for all customers. It is important that investors read Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount. Supporting documentation for any claims, if applicable, will be furnished upon request. Moomoo does not guarantee favorable investment outcomes. The past performance of a security or financial product does not guarantee future results or returns. Customers should consider their investment objectives and risks carefully before investing in options. Because of the importance of tax considerations to all options transactions, the customer considering options should consult their tax advisor as to how taxes affect the outcome of each options strategy. All company analysis information is provided by third parties and not by Moomoo Financial Inc. Any illustrations, scenarios, or specific securities referenced herein are strictly for informational purposes and is not a recommendation. Past investment performance does not guarantee future results. Investing involves risk and the potential to lose principal. This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Furthermore, there is no guarantee that any statements, estimates, price targets, opinions or forecasts provided herein will prove to be correct.
Options trading entails significant risk and is not appropriate for all customers. It is important that investors read Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount. Supporting documentation for any claims, if applicable, will be furnished upon request. Moomoo does not guarantee favorable investment outcomes. The past performance of a security or financial product does not guarantee future results or returns. Customers should consider their investment objectives and risks carefully before investing in options. Because of the importance of tax considerations to all options transactions, the customer considering options should consult their tax advisor as to how taxes affect the outcome of each options strategy. All company analysis information is provided by third parties and not by Moomoo Financial Inc. Any illustrations, scenarios, or specific securities referenced herein are strictly for informational purposes and is not a recommendation. Past investment performance does not guarantee future results. Investing involves risk and the potential to lose principal. This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Furthermore, there is no guarantee that any statements, estimates, price targets, opinions or forecasts provided herein will prove to be correct.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
Moomoo Senior News and Community Manager
Former editor at Bloomberg, then Lazard Asset Management. Posts aren’t investment advice. Views are just mine.
4136Followers
16Following
11KVisitors
Follow
Alen Kok : OK
Clement Lemons : okk
104247826 :![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
Cypher : “Peter Benedict, who has an outperform rating on the stock, said he expects Tesla shares to respond favorably, the report showed.” Why is Tesla* mentioned here?
@Kevin Travers