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Heavy upside action in retail space

David Russell (david.russell@optionmonster.com)

Traders are banking on a strong holiday season, shopping for upside in retailers such as Nordstrom, Tiffany, and Best Buy.

Retail has steadily climbed all year as the broader economy improves, and last week's blowout jobs report suggests we might now have a strong holiday shopping season.

TIF was the first name to light up optionMONSTER's Heat Seeker monitoring system today. More than 2,300 December 80 calls were purchased, mostly for $3.20, compared with previous open interest of 1,610 contracts. The stock is up 1.86 percent to $81.13.

JWN hit minutes later as 2,000 November 62.50 calls were bought, mostly for $0.64. Those contracts expire at the end of the week, but the clothing chain reports earnings after the bell on Thursday, so they're positioning for a strong set of numbers. Shares are up 1.2 percent to $61.75.

BBY followed almost immediately with the purchase of 7,500 December 44 calls for $2.47 and the sale of an equal number of December 49s for $0.77. That's a bullish call spread with the potential to almost triple the investor's money if the electronics chain closes at $49 or higher on expiration. BBY is up 3.85 percent to $44.04. (See our Education section)

Total option volume is more than triple average in all three stocks, with calls dominating the activity.

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