Target Corp. (TGT) was trading at 57.71 earlier today when a customer sold the July 57.5/60 put spread just over 7000 times at a price of 1.60. With open interest of just over 5,000 contracts on the 60 strike this is certainly an opening trade.? While the trade is a put spread, it is actually bullish as the customer is hoping TGT rebounds to over 60 by the end of july expiration.? This is the synthetic equivalent of owning the 57.5/60 call spread for a price of 1.40.
This trade should be viewed as mildly bullish volatility and bullish the underlying.? The trader will hit maximum profit above 60.00 a share.? Traders looking to piggy back this trade could look at the july 60 calls which should still benefit with any rally and are likely cheaper due to selling pressure on the 60 puts.