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Option traders pour into TGT, JWN, and KSS.
Steve Claussen is the Chief Investment Strategist for OptionsHouse. His 26-year career in the derivatives industry took him from the Chicago Board of Trade to Wachovia and eventually OptionsHouse. July 1, 2009 2:36 EDT
We are seeing institutional buyers of bearish puts on department store stocks in January. Specifically, Target (TGT) Jan 35 puts, Nordstrom (JWN) Jan 17.5 puts and Kohls (KSS) Jan 40 puts were all purchased within the same 10-minute span.
The timing appears to be too close to be considered coincidental. This leads me to believe the same customer is looking to hedge against a downside move in these department store leaders for the remainder of this year.
At the very least, this action seems to indicate an attempt to protect against negative impact in the market if the so-called economic recovery, as predicted by the pundits, fails to manifest and consumers remain tightfisted through the holiday season.