Target is set to report earnings on Wednesday morning, but one big trader thinks the retailer is set to miss the mark.
In a big trade on Monday, one firm bought 1,000 November 66.50/63.50 put spreads for $0.60 per share. This short-term trade only makes money if Target shares fall below $66.50 by Friday, with a maximum profit of $2.40 per share, or $240,000 in total, if Target falls to $63.50 or below.
On the whole, the options market isn't expecting a massive move from Target. Options prices tell us that traders expect a 3 percent, one-day move off of earnings. That is in line with the stock's recent responses to earnings.