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Call Buyers Rush TJX Before Earnings

Shoppers have been flocking to TJX's stores in this rough economy, and now the call buyers are coming along as well.

OptionMonster's tracking systemslit up yesterday with a steady stream of purchases in the August 42 strike, which traded more than 4,800 contracts against open interest of 1,595. Large paper priced for $0.70, but there were also trades in size down to $0.55.

Earnings come out before the bell this morning, and those numbers will have to impress with TJX clinging to support around its 200-day moving average. The shares edged higher by 1.15 percent to close at $41.37 yesterday. They'll need to rally quickly for the calls to turn a profit or they'll expire worthless at the end of this week.

Management has already said the second-quarter will beat the high end of its projected $0.70 to $0.73 profit range. Earlier this year, TJX said it would nearly double its footprint to 4,200 stores as it continues to gain traction from consumers trading down in search of bargains.

The company's chains include T.J. Maxx and Marshalls.

Calls outnumbered puts by 12 to 1 in a heavy session yesterday, with total option volume 4 times average.

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TJX Competes With:

Kohl's

Macy's

Target

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Pete Najarian is a professional investor, CNBC contributor, regular co-host of CNBC's "Fast Money" and co-founder of OptionMonster.com.

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