Amazon's big buyout news is shaking up the consumer discretionary sector
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.