Market Overview

Dan Nathan's Target Trade


Dan Nathan spoke on CNBC's "Options Action" about Target Corporation (NYSE: TGT). He thinks the company is going to have a good year because it's going to be very active in acquisitions.

It's trading at a big discount to the market and to Wal-Mart Stores Inc (NYSE: WMT), added Nathan. He explained that the stock is trading at its technical support and he expects to see a rally in the third quarter. Nathan wants to sell the July 60 call for $0.55 and buy the October 60 call for $1.55. The options structure would cost him $1. If the stock trades below $60 at the July expiration and then rallies above $61, Nathan is going to make money on this trade.


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