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Options Action: Retail

Wednesday, 7 Apr 2010 | 5:30 PM ET

With so much uncertainty in the market, how should you game retail as we head into earnings season?

If you’re cautiously optimistic about the consumer, Mike Khouw of Cantor Fitzgerald suggests using options to place bullish bets. That way you capture gains on the upside but limit your losses.

Here’s how Khow suggests trading Target:

Target Options Chain - Stock $53.40
Buy May 57.5-Strike Call For $0.60

How Mike's Options Trade Make Money
Profit above $58.10
Losses below $58.10

Options Action
A bullish call in buying Target, with Mike Khouw, Cantor Fitzgerald senior equities strategist.

Learn more about this trade. Watch the video now!




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Trader disclosure: On Apr 7, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Jon Najarian Owns owns call spreads in (PALM), (TXT), (AAPL); Jon Najarian Owns (AAPL) Call Spreads; Jon Najarian Owns (AKS), Is Short (AKS) Calls; Jon Najarian Owns (BAC) Preferred; Jon Najarian Owns (FCX), Is Short (FCX) Calls; Jon Najarian Owns (C) Preferred; Jon Najarian Owns (GS), Is Short (GS) Calls; Jon Najarian Owns (IP) Call Spreads; Jon Najarian Owns (MCD), Is Short (MCD) Calls; Jon Najarian Owns (MS) Preferred; Jon Najarian Owns (NYT); Jon Najarian Owns (PALM) Call Spreads; Jon Najarian Owns (RIMM), Is Short (RIMM) Calls; Jon Najarian Owns (WFC) Preferred; Jon Najarian Owns (WMT), Is Short (WMT) Calls; Jon Najarian Owns (PALM) Call Spreads, (TXT) Call Spreads, (AAPL) Call Spreads; Terranova Owns Gold, Oil; Terranova Is Short (XLY); Kelly Owns (FXE) Puts; Finerman's Firm Is Short (IYR), (IJR), (IWM), (MDY), (SPY); Finerman's Firm Is Long S&P Puts; Finerman Owns (AAPL); Finerman's Firm Owns (BAC), (BAC) Leap; Finerman Owns (BAC), (BAC) Preferred; Finerman's Firm And Finerman Own (CVS); Finerman's Firm And Finerman Own (JPM); Finerman Owns (USO); Finerman's Firm And Finerman Own (WFC) Preferred; Finerman's Firm Owns (WMT), (YUM), (MCD), (SKS); Funds Managed By Dennis Gartman Are Short S&P 500; Funds Managed By Dennis Gartman Are Short Euro; Funds Managed By Dennis Gartman Are Short Yen’ Funds Managed By Dennis Gartman Are Long Gold; Funds Managed By Dennis Gartman Are Long Natural Gas Trusts; Funds Managed By Dennis Gartman Are Long Copper; Funds Managed By Dennis Gartman Own (AAPL); Funds Managed By Dennis Gartman Own (DRI); Funds Managed By Dennis Gartman Own (FCX); Funds Managed By Dennis Gartman Own (GLD); Funds Managed By Dennis Gartman Own (PNRA); Funds Managed By Dennis Gartman Are Short (RIMM); Funds Managed By Dennis Gartman Are Short (SPLS)

For Deborah Weinswig
Citi Employees Own (WMT)
A Citi Employee Owns (JCP)
A Citi Employee Owns (LOW)
Citigroup Global Markets Or Affiliates Owns 1% Or More Of (SKS)
Citigroup Global Markets Or Affiliates Has Managed Or Co-Managed An Offering Of (KR), (SVU), (WMT) In Past 12 Months
Citigroup Global Markets Or Affiliates Have Received Investment Banking Compensation For Services Provided In Past 12 Months From (KR), (SKS), (SVU), (WMT)
Citigroup Global Markets Or Affiliate Received Non-Investment Banking Compensation In Past 12 Months From (HD), (JCP), (KSS), (KR), (M), (SWY), (SVU), (WAG), (WMT), (COST)
(KR), (SKS), (SVU), (WMT) Are Or In Past 12 Months Were Investment Banking Clients Of Citigroup Global Markets
(CVS), (HD), (JCP), (KSS), (KR), (M), (SWY), (SKS), (SVU), (WAG), (WMT),

(COST) Are Or In Past 12 Montsh Were Clients Of Citigroup Global Markets (Non-Investment Banking, Securities-Related Services)
(HD), (JCP), (KSS), (KR), (M), (SWY), (SVU), (WAG), (WMT), (COST) Are Or In Past 12 Months Were Clients Of Citigroup Global Markets (Non-Investment-Banking, Non-Securities Related Services)
Citigroup Global Markets Is A Market Maker In (CVS), (M), (COST)
Citigroup Global Markets And/Or Affiliates Has A Significant Financial Interest In Relation To (CVS), (HD), (JCP), (KSS), (KR), (LOW), (M), (JWN), (SWY), (SKS), (SVU), (WMT), (COST)
Citigroup Global Markets Or Affiliates Beneficially Owns 5% Or More Of (SKS)

For Richard Kang
Emerging Global Advisors Owns Jiangxi Copper Co. HK Listed Shares In Its ETFs
Emerging Global Advisors Owns China Telecom Corp. HK Listed Shares In Its ETF

For Ben Fulton
Invesco PowerShares Sponsors And Manages (XLYS), (XLPS), (XLES), (XLFS), (XLVS), (XLIS), (XLKS), (XLBS), (XLUS)




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