Heavy Put Volume in TJX Amid Earnings Expectations

TJX (TJX) sees heavy bearish put volume with 12,348 puts trading, 10x expected volume, and a Put/Call Ratio of 11.76. The most active strikes are the 8/22 weekly 111 puts and Aug-25 120 puts, with total volume near 11,200 contracts. ATM IV is up over 1 point, with earnings expected on August 20th.

TJX Companies (TJX) has seen a surge in bearish put option activity, with 12,348 put contracts trading, which is ten times the expected volume. This unusual trading activity has resulted in a Put/Call Ratio of 11.76, indicating a strong bearish sentiment among traders [2]. The most actively traded options were the weekly 111 puts set to expire on August 22 and the August 25 puts with a strike price of 120, accounting for nearly 11,200 of the total contracts traded. This significant put volume suggests that investors are positioning themselves for a potential decline in TJX's stock price.

The at-the-money (ATM) implied volatility (IV) has also increased by over one point during the session, further indicating heightened uncertainty and bearish expectations. This surge in put option trading comes ahead of TJX's earnings announcement scheduled for August 20. Wall Street analysts have forecasted an average target price of $141.65 for TJX, with a high estimate of $164.00 and a low estimate of $87.12. The consensus recommendation from 22 brokerage firms is currently "Outperform," indicating a positive outlook despite the bearish put volume [2].

TJX's recent financial performance has shown mixed results. The company reported a 3% increase in comparable sales, driven by customer transactions, but also experienced a decrease in pre-tax profit margin and gross margin. The company's earnings per share (EPS) exceeded expectations, which may have contributed to the bearish sentiment reflected in the put option trading. Despite the bearish activity, TJX's full-year sales and earnings guidance remains positive, suggesting a potential recovery in investor sentiment post-earnings [2].

In summary, TJX Companies is facing significant bearish put volume ahead of its earnings announcement, indicating a strong bearish sentiment among traders. The unusual trading activity and increased IV suggest heightened uncertainty and expectations of a potential decline in stock price. However, the company's positive earnings guidance may help to alleviate some of the bearish sentiment.

References:
[1] https://www.marketbeat.com/stocks/NYSE/TJX/short-interest/
[2] https://www.gurufocus.com/news/2981774/tjx-experiences-high-put-option-activity-amid-upcoming-earnings-tjx-stock-news