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Dan Nathan Sees Unusual Options Activity In Target


CNBC Options Action's Dan Nathan said on the show that he noticed unusually high options activity in Target Corporation (NYSE: TGT).

Nathan explained that the company is going to report earnings on Tuesday and options are implying a 3 percent one-day move. When the stock was trading at $67.50, a trader bought 1,000 contracts of the November 66.50 puts and sold 1,000 contracts of the November 63.50 puts, paying $0.60 for the spread. This set up breakeven at $65.90 with a maximal gain of $2.40.

Target had a 10 percent move higher in the last couple of weeks and the trader is expecting for the stock to retrace a good part of the move.


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