COST, TGT Stocks On the Move Today – Schaeffers Research (blog)

Stocks are trading modestly lower, as news of Amazon’s Whole Foods buyout shakes up the consumer discretionary sector. As such, retail stocks Costco Wholesale Corporation (NASDAQ:COST) and Target Corporation (NYSE:TGT) are making big moves today. Here’s a quick look at what’s moving shares of COST and TGT.

COST Options Explode After Whole Foods News

Costco shares have plunged 6.6% to trade at $168.14, and are at risk of closing below their 80-day moving average for the first time since early December. Options traders have been quick to weigh in, with more than 167,000 contracts traded — 12 times the expected intraday rate, and double the 12-month high of 77,816 COST options traded in a single session, set on March 3.

Most active is the June 170 call, which appears to have seen a mix of buy- and sell-to-open activity ahead of tonight’s expiration. Those initiating long calls expect COST stock to bounce back above $170 by the closing bell, while those initiating short calls expect the shares to settle the session south of the strike.

Options Hot as Target Stock Gets Short-Sale Restricted

TGT stock is trading down 6.3% at $51.71, after earlier hitting a five-year low of $48.56. This is just more of the same for the retail shares, though, which are currently staring at a 28.4% year-to-date deficit. With Target short-sale restricted today, its options pits are also in overdrive, while its 30-day at-the-money implied volatility topped out at a 52-week peak earlier.

At last check, 175,000 TGT options had traded — taking out the current annual high of 163,666 contracts traded on Feb. 28, and more than six times what’s typically seen at this point in the day. A number of options traders are betting on round-number support to hold through tonight’s close, with sell-to-open activity detected at the June 50 put.

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