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Halftime—Pete Najarian: Explosive Upside Call Buying In This Department Store

Options investors are really expecting a 'Miracle on 34th Street' this year, according to Pete Najarian.

The world's largest department store, Macy's is not only a shopping empire, it's a name that's been on the sheets time and time again in the options market, said Najarian. This time, a lot of Dec. 26 calls are trading hands, though they expire on Friday. There is also heavy buying of the Jan. 27 and Jan. 29 calls.

"Macy's is always one of these names that seems to get the attention," Najarian noted. "Obviously the holiday season. Maybe something in January, but this something that's happened multiple times over last couple months."

Najarian thinks Macy's has upside.

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BEST RETAIL TRADES?

As the last holiday gifts ship off and the final shopping days before Christmas approach, what's the best retail play here?

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Not a Scientific Survey. Results may not total 100% due to rounding.

Patty Edwards, chief financial officer at Virtus Financial, likes Coach , Tiffany & Co. , Target , Nordstrom , Limited , Abercrombie & Fitch and Nike .

Najarian backed up Edwards' call on Nike, stating that, "Nike is one of these names that has continued to perform." Joe Terrenova of Virtus Investment Partners is long the maker of athletic apparel.

Stuart Frankel's Steve Grasso supported Edwards' pick of ANF. He thinks the stock could go to $60 a share.

Edwards recommended avoiding shares of AnnTaylor , American Eagle , Bebe , Best Buy , Tablots , Aeropostale and Walmart right now.

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NETFLIX ATTRACTIVE OR NOT SO MUCH?

Technology stocks topped the tape on Friday, including shares of Netflix. After selling off about 11 percent from its all-time highs, has the stock bottomed?

Famed value investor Whitney Tilson of T2 Partners doesn't think so. He's staying short Netflix and said valuation is still too extreme and margins will be severely squeezed.

"I'm a big believer of owning a Netflix subscription," Edwards said. "Not so much the stock."

Terranova noted that Netflix's content costs are rising. He's also concerned that its subscription growth could slow down. As a trade, he thinks the stock has bottomed, but longer-term, he's not sure he'd be in it.

Najarian said if he were to short Netflx, he would only do so through put spreads. He wouldn't want to be naked because it's too volatile of a stock.

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COMMODITY SURGE

Gold mixed on Friday, on track to close the week down about 1 percent. After gaining about 25 percent this year, is this safe haven trade finally coming to an end?

For answers, the "Fast Money" desk turned to Rich Ilczyszyn of Lind-Waldock. Watch the videoto see the full interview.

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POPS & DROPS

Stocks shaved some of their losses Friday, but were still pressured by rekindled worries over sovereign debt worries in the euro zone despite evidence of a recovering economy in the U.S. and passage of a bill extending Bush-era tax cuts. To see what market movers caught the traders' attention, watch the video.

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CALL THE CLOSE

Before the traders concluded Friday's "Halftime Report," they revealed what plays they expect to make and offered predictions on which way the market could close:

Terranova is long regional banks, but didn't name on in particular.

Edwards said she's waiting until after options expiration to buy.

Grasso thinks the market could close higher.

Najarian likes Visa at current levels.

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Trader disclosure: On Dec. 17, 2010, following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Pete Najarian owns (YHOO). Pete Najarian owns (MSFT) call spreads. Pete Najarian owns (BMO) call spreads. Pete Najarian owns (C). Pete Najarian owns (MCD) call spreads. Pete Najarian owns (M) call spreads. Pete Najarian owns (WLT) call spreads. Pete Najarian owns (CNI) calls. Pete Najarian owns (MS). Pete Najarian owns (F) bonds. Pete Najarian owns (BBY) calls. Pete Najarian owns (GE). Pete Najarian owns (SMH) call spreads. Joe Terranova owns (CRM), (VRTS), (C), (UPL), (PEP), (GLD) puts, (GS), (OXY), and (NKE). Steve Grasso owns (ASTM), (BA), (BAC), (BWC), (C), (CSCO). Grasso owns (JPM), (LIT), (LPX), (MOT), (MHY), (NDAQ), (PFE), (PRST), (S) and (X).

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JOE TERRANOVA
Terranova is Chief Market Strategist of Virtus Investment Partners, LTD
Virtus Investment Partners Owns More Than 1% Of (ABAX)
Virtus Investment Partners Owns More Than 1% Of (ALK)
Virtus Investment Partners Owns More Than 1% Of (AMKR)
Virtus Investment Partners Owns More Than 1% Of (CCG)
Virtus Investment Partners Owns More Than 1% Of (CASS)
Virtus Investment Partners Owns More Than 1% Of (CSVI)
Virtus Investment Partners Owns More Than 1% Of (EPR)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (FCFS)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (KRC)
Virtus Investment Partners Owns More Than 1% Of (LDR)
Virtus Investment Partners Owns More Than 1% Of (LPHI)
Virtus Investment Partners Owns More Than 1% Of (MGRC)
Virtus Investment Partners Owns More Than 1% Of (NRCI)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (XLE)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (XLK)
Virtus Investment Partners Owns More Than 1% Of (XLU)
Virtus Investment Partners Owns More Than 1% Of (SUBK)
Virtus Investment Partners Owns More Than 1% Of (WDFC)
Virtus Investment Partners Owns More Than 1% Of (YDNT)
Virtus Investment Partners Owns More Than 1% Of (CLB)
Virtus Investment Partners Owns More Than 1% Of (DRYS)

PATTY EDWARDS
Edwards owns (AAPL) for clients
Edwards owns (MSFT) for clients
Edwards owns (GS) for clients
Edwards owns (BMO) for clients
Edwards owns (C) for clients
Edwards owns (CME) for clients
Edwards owns (V) for clients
Edwards owns (NKE) for clients
Edwards owns (AMZN) for clients
Edwards owns (F) for clients
Edwards owns (XLK) for clients
Edwards owns (GLD) for clients
Edwards owns (SLV) for clients
Edwards owns (GE) for clients

STEVE GRASSO
Stuart Frankel & Co and its partners own (AAPL)
Stuart Frankel & Co and its partners own (AMGN)
Stuart Frankel & Co and its partners own (BP)
Stuart Frankel & Co and its partners own (CUBA)
Stuart Frankel & Co and its partners own (GE)
Stuart Frankel & Co and its partners own (GERN)
Stuart Frankel & Co and its partners own (HPQ)
Stuart Frankel & Co and its partners own (HSPO)
Stuart Frankel & Co and its partners own (NWS.A)
Stuart Frankel & Co and its partners own (NYX)
Stuart Frankel & Co and its partners own (OPEN)
Stuart Frankel & Co and its partners own (PDE)
Stuart Frankel & Co and its partners own (PFE)
Stuart Frankel & Co and its partners own (PRST)
Stuart Frankel & Co and its partners own (RDC)
Stuart Frankel & Co and its partners own (TLM)
Stuart Frankel & Co and its partners own (XRX)
Stuart Frankel & Co and its partners own (SDS)
Stuart Frankel & Co and its partners own (UNM)
Stuart Frankel & Co and its partners are short (QQQQ)
Stuart Frankel & Co and its partners are short (AAPL)

MOSHE ORENBUCH
Credit Suisse Is A Market Maker Or Liquidity Proivder For (V), (MA)
Credit Suisse Securities (USA) LLC Is A Market Maker In (MA)
(MA) is or in past 12 months was a client of Credit Suisse
Credit Suisse provided investment banking services to (MA) within the past 12 months
Credit Suisse expects to receive/seek investment banking comp. from (MA) within next three months
Credit Suisse expects to receive/seek investment banking comp. from (V) within next three months
Credit Suisse owns 1% or more of (V)

RICH ILCZYSZYN
Ilsczyszyn has no disclosures

CNBC.com with wires.

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LB
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NFLX
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NKE
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TGT
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TIF
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V
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WMT
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