💎 TJX $2.5M Diagonal Call Spread - Bulls Betting on Post-Earnings Rally! 🚀

📅 November 19, 2025 | 🔥 Unusual Activity Detected

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🎯 The Quick Take

Someone just loaded up $2.5 MILLION in TJX call spreads this morning at 10:27:08, betting on continued strength following today's monster earnings beat! This sophisticated diagonal call spread bought 2,100 contracts spread across January and April expirations - positioning for a sustained rally in the world's largest off-price retailer. With TJX crushing Q3 earnings (+5% comps, EPS beat, raised guidance) and hitting all-time highs at $151, smart money is doubling down on the "off-price golden age" thesis through Q1 2026. Translation: Institutional players see this earnings rally as just the beginning!

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📊 Company Overview

The TJX Companies (TJX) is the undisputed king of off-price retail, operating the brands everyone knows:
- Market Cap: $162.02 Billion (largest apparel retailer globally)
- Industry: Retail-Family Clothing Stores
- Current Price: $145.44-$151.25 (all-time high territory!)
- Primary Business: T.J. Maxx, Marshalls, HomeGoods, Sierra - off-price apparel, accessories, and home merchandise sourced at 20-60% discounts

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💰 The Option Flow Breakdown

The Tape (November 19, 2025 @ 10:27:08):

Time	Symbol	Buy/Sell	Call/Put	Expiration	Strike	Volume	Premium	Z-Score	Strategy
10:27:08	TJX	BUY	CALL $145	2026-01-16	$145	2,100	$1.4M	6.42	Diagonal Call Spread
10:27:08	TJX	BUY	CALL $155	2026-04-17	$155	2,100	$1.1M	27.75	Diagonal Call Spread

Total Premium: $2.5 Million ($1.4M + $1.1M combined)

🤓 What This Actually Means

This is a bullish diagonal call spread - a sophisticated multi-leg strategy that professional traders use when they expect a sustained upward move over several months! Here's the breakdown:

• 💰 Massive capital deployment: $2.5M total premium across 4,200 contracts (2,100 contracts × 2 legs)
• 📅 Two different expirations: January 16th ($145 calls) and April 17th ($155 calls)
• 🎯 Strategic strikes: $145 strike just below current price (~$145-151), $155 strike targeting 6.7% upside
• ⏰ Time arbitrage: Buying more time on the $155 calls (149 days) vs shorter duration on $145 calls (58 days)
• 🏦 Institutional sophistication: This is advanced options strategy, not retail speculation

What's really happening here:
This trader is playing a diagonal call spread expecting TJX to rally from current $145-151 levels toward $155+ by April 2026. The structure suggests they want exposure to near-term upside with the $145 January calls, while simultaneously positioning for extended gains through the $155 April calls. Think of it like buying both a sprint ticket AND a marathon ticket - they're betting on continued strength after today's earnings beat, expecting momentum to carry through Q4 holiday season (captured by January calls) AND into Q1 2026 earnings (captured by April calls).

Why a diagonal spread? This structure is CHEAPER than buying outright calls at both strikes/expirations while still capturing most of the upside. The trader is essentially saying: "I want exposure to near-term rally potential but also believe the story extends into Q1 2026 when international expansion and store growth accelerate."

Unusual Score: 🔥 EXTREME (448x average size) - This happens maybe once a year! The $1.4M leg alone scores 8.5/10 unusual rating, while the $1.1M April leg is even more extreme with a Z-score of 27.75. Combined $2.5M deployment in a single timestamp is INCREDIBLY rare for TJX - we're talking about a trade 448 times larger than the average TJX options flow. This is 99.98th percentile activity - only 6 larger trades in recent history.

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📈 Technical Setup / Chart Check-Up

YTD Performance Chart

TJX is on an absolute tear - up +26.75% YoY with current price surging to all-time high of $151.25 in today's pre-market session following stellar Q3 earnings. The chart tells a compelling "off-price golden age" story - steady, consistent uptrend throughout 2025 with minimal drawdowns.

Key observations:
- 🚀 All-time high breakout: Smashed through prior $150.46 ATH on November 12, now extending gains post-earnings
- 📈 Sustained uptrend: Clean trend higher with strong institutional accumulation throughout the year
- 💪 Earnings catalyst acceleration: Stock gapping 3.89% in pre-market to $151.25 on Q3 beat
- 📊 Low volatility grind: Steady gains rather than parabolic spikes - hallmark of quality compounding story
- ✅ Defensive retail leadership: Outperforming traditional department stores and even some luxury retailers

Gamma-Based Support & Resistance Analysis

Current Price: $145.62 (gamma data from market close before earnings gap)

The gamma exposure map reveals critical price magnets and barriers that will govern near-term price action:

🔵 Support Levels (Put Gamma Below Price):
- $145 - MASSIVE support with 9.7B total gamma exposure (strongest nearby floor!) - This is EXACTLY where the January $145 calls are struck!
- $140 - Secondary support at 4.7B gamma (dealers will defend this level aggressively)
- $135 - Structural floor with 2.1B gamma (4% pullback scenario)
- $130 - Deep support at 2.1B gamma (disaster floor - 10.7% below current)

🟠 Resistance Levels (Call Gamma Above Price):
- $146 - Immediate ceiling with 3.4B gamma (0.3% overhead - likely breaks on earnings gap)
- $147 - Secondary resistance at 4.4B gamma (1% above current)
- $148-149 - Minor resistance zone with ~2B gamma each
- $150 - MAJOR ceiling zone with 18.3B gamma (STRONGEST RESISTANCE LEVEL - highest single strike!)
- $155 - Extended upside target at 1.4B gamma (6.4% rally required) - The April $155 call strike target!

What this means for traders:
TJX was trading right at massive $145 support when this flow hit, but the post-earnings gap to $151 has BLOWN through all intermediate resistance levels. The gamma data shows $150 with 18.3B call gamma is THE critical resistance - by far the strongest level. This creates natural selling pressure as market makers hedge, but today's earnings beat may provide enough momentum to power through.

Notice the strategic positioning? The trader bought $145 January calls RIGHT at the strongest support level (9.7B gamma), ensuring maximum protection if stock pulls back. Meanwhile, the $155 April calls target the 6.4% upside level where there's much lighter resistance (1.4B gamma) - smart strike selection!

Net GEX Bias: Strongly Bullish (42.2B call gamma vs 15.4B put gamma) - Overall positioning overwhelmingly favors continued upside, with call gamma nearly 3x put gamma.

Implied Move Analysis

Options market pricing for upcoming expirations:

• 📅 Weekly/Monthly OPEX (Nov 21 - 2 days): ±$2.69 (±1.85%) → Range: $142.75 - $148.13
• 📅 Quarterly Triple Witch (Dec 19 - 30 days): ±$6.02 (±4.14%) → Range: $139.43 - $151.46
• 📅 January OPEX (Jan 16 - 58 days - FIRST LEG!): ±$7.74 (±5.32%) → Range: $137.68 - $153.21
• 📅 April OPEX (Apr 17 - 149 days - SECOND LEG!): ±$12.17 (±8.37%) → Range: $133.11 - $157.78

Translation for regular folks:
The options market was pricing a modest 1.85% move ($2.69) by Friday's OPEX before today's earnings - but TJX just gapped 3.89% in pre-market, EXCEEDING the entire expected weekly range! This is exactly what the diagonal spread buyer anticipated - using earnings volatility to get their position established.

The January 16th expiration (first leg at $145 strike) has an upper range of $153.21 - meaning the market thinks there's solid probability TJX trades to $153 over the next 58 days. With stock already at $151 post-earnings, those calls are likely already profitable!

The April 17th expiration (second leg at $155 strike) has an upper range of $157.78 - the trader needs ~8% total upside from the $145 entry point to hit maximum profitability. Given TJX's consistent execution and international growth runway, this is absolutely achievable by April.

Key insight: The diagonal spread structure is PERFECT for this setup - the trader gets immediate delta exposure from the $145 January calls (capturing Q4 holiday strength), while the $155 April calls provide extended exposure through Q4 FY26 earnings (expected late February) and into March/April when Spain expansion and international growth accelerate.

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🎪 Catalysts

🔥 Catalysts Already Happened (TODAY!)

Q3 Fiscal 2026 Earnings - November 19, 2025 (THIS MORNING!) 📊

TJX just CRUSHED Q3 earnings this morning, beating across the board and raising full-year guidance:

Financial Results (Quarter Ended November 1, 2025):
- 💰 Net Sales: $15.12B (+7% YoY vs. Q3 FY25 $14.1B)
- 📈 Comparable Store Sales: +5% (crushed analyst expectations of +3.7% - this is the KEY metric!)
- 🎯 Diluted EPS: $1.28 vs. $1.23 expected (+12% YoY growth)
- 💚 Beat on ALL metrics: Revenue $15.12B vs. $14.85B expected
- 📊 Pretax Profit Margin: 12.7% (+0.4 points YoY expansion)

Divisional Performance Winners:
- 🌍 TJX International: +7% comp sales (STRONGEST segment - Europe/Australia crushing it!)
- 🇺🇸 Marmaxx (TJ Maxx/Marshalls/Sierra): +3% comps (solid U.S. performance)
- 🏡 HomeGoods: +3% comps (home category staying resilient)
- 🇨🇦 TJX Canada: +2% comps

Management Bullish Commentary:
CEO Ernie Herrman stated the holiday shopping season is off to a "strong start" with "outstanding" merchandise availability and compelling deals in the marketplace. Stock surged 3.89% in pre-market to $151.25 on the results.

Why this matters for the trade: The diagonal spread buyer timed this PERFECTLY - buying immediately after earnings removes the binary event risk while capturing the momentum from the beat. They're essentially saying "Q3 beat validates the thesis, now we ride the wave through Q4 and Q1."

📅 Updated Fiscal Year 2026 Guidance (RAISED!)

TJX increased full-year FY26 guidance across the board:

Full Year FY26 (Raised from Prior Guidance):
- 📊 Comparable Sales Growth: Raised to +4% (vs. previous 3.4% consensus)
- 💰 Pretax Profit Margin: 11.6% (increased 0.1 pts)
- 🎯 Diluted EPS: $4.63-$4.66 range (vs. prior $4.61 consensus; +9% YoY from FY25 $4.26)

Q4 FY26 Outlook (Fourth Quarter Guidance):
- 📈 Comparable Sales: Guided +2% to +3% (slight deceleration from Q3's +5% but still solid)
- 💵 Pretax Margin: 11.7%-11.8%
- 📊 Diluted EPS: $1.33-$1.36

Critical assumption: Guidance assumes current tariff levels remain in place, with company able to continue offsetting tariff pressure through opportunistic sourcing.

🚀 Near-Term Catalysts (Q4 2025 - Q1 2026)

Holiday Season Execution (November-December 2025) 🎄

Q4 is TJX's highest-revenue quarter historically, and management just said it's off to a "strong start":

• 🛍️ Full inventory levels with "outstanding" merchandise availability
• 💸 Off-price model positioned to benefit from value-conscious holiday shoppers
• 📦 "Treasure hunt" positioning drives repeat visits during gift-buying season
• ⚠️ Guidance of +2-3% Q4 comps implies some caution, but off lower base vs Q3

The $145 January calls expire 3 weeks AFTER holiday season completes - perfectly timed to capture Q4 performance without the December 25th timing risk.

Q4 Fiscal 2026 Earnings - Expected Late February 2026 📊

Based on historical patterns, TJX will report full year FY26 results and Q4 performance around February 26, 2026:

• 🎯 Key Metrics to Watch: Q4 comp sales (+2-3% guidance range), full year EPS vs. $4.63-$4.66 raised guidance
• 📈 Holiday comp sales: Q4 typically strongest quarter - beat here drives upside
• 🌍 International growth sustainability: Can TJX maintain +7% international comps into 2026?
• 💰 FY27 guidance: First look at 2026 calendar year outlook signals confidence
• 🏪 Store expansion progress: Updates on 130-store FY26 expansion plan and path to 7,000 total stores

The $155 April calls expire 7 weeks AFTER Q4 earnings - giving time for any post-earnings rally to play out if results beat.

International Expansion Acceleration 🌍

TJX International posted +7% comp sales in Q3 - the strongest performing division:

• 🇪🇸 Spain Entry: First T.K. Maxx stores opening by early 2026, representing new geographic market
• 🇦🇺 Australia noted for "outstanding" performance in earnings call
• 🇪🇺 Europe continuing strong growth trajectory
• 📊 International net sales grew from $6.77B to $7.18B (+6% YoY)

Why this matters: International expansion is a MULTI-YEAR growth driver with higher growth rates than mature U.S. market. The $155 April calls bet on Spain entry momentum and continued international strength.

Store Expansion Milestones 🏪

TJX opened 131 net-new stores in FY25, reaching 5,085 total stores globally, with aggressive FY26 plan:

• 🇺🇸 U.S. Stores: 40 new TJ Maxx/Marshalls, 30 HomeGoods, 20 Sierra, 9 HomeSense locations
• 🌍 International: 12 new stores in Canada, 22 in Europe, 6 in Australia
• 🎯 Total FY26: 130 net-new stores planned
• 📈 Long-term target: 7,000 locations (vs. 5,085 today) implies 1,900+ additional stores over coming years

⚠️ Risk Catalysts to Monitor

Tariff Policy Evolution 🚨

Current guidance assumes tariffs remain at November 19 levels:

• ⚖️ Any escalation above current 10% China tariffs could compress margins
• ✅ However, TJX positioned to benefit from tariff "chaos" through opportunistic closeout buying
• 💪 Management commentary suggests tariffs present both risk AND opportunity
• 🔄 TJX sources from distributors rather than direct manufacturers, providing buffer

Q4 Guidance Implies Deceleration 📉

Q4 guidance of +2-3% comp sales implies notable slowdown from Q3's +5%:

• 🤔 Signals potential consumer demand softening despite "strong start" commentary
• ⏰ Tougher YoY comparisons in Q4 2025 vs. Q4 2024
• 💸 Holiday spending uncertainty amid economic caution

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🎲 Price Targets & Probabilities

Using gamma levels, implied move data, and upcoming catalysts, here are the scenarios through April 17th expiration:

📈 Bull Case (40% probability)

Target: $155-$165

How we get there:
- 💪 Q4 holiday season CRUSHES with comps toward +3-4% high-end of guidance (vs. +2-3% guided)
- 🌍 International expansion (+7% comps) accelerates further with Spain entry successful
- 🎯 Q4/FY26 earnings (late Feb) beat expectations with FY27 guidance surprising to upside
- 🏪 Store expansion on track (130 net-new in FY26), investor confidence in 7,000-store target
- 💰 Management reaffirms tariffs creating buying opportunities, margin expansion continues
- 📊 Off-price sector momentum accelerates as traditional retail struggles
- 📈 Breakout above $150 gamma resistance (18.3B) triggers technical rally to $155+ (diagonal spread target!)

Key metrics needed:
- Q4 comp sales +3%+ (vs. +2-3% guidance)
- Q4 FY26 earnings beat EPS $1.36+ (vs. $1.33-1.36 range)
- FY27 guidance showing sustained +4%+ comp growth trajectory
- International comps maintaining +6-7% growth rates

Why 40% probability: TJX just proved execution with Q3 beat, stock at all-time highs with momentum, international growth providing tailwind, and off-price model benefiting from economic uncertainty. Diagonal spread buyer clearly thinks this is the base case. Gamma resistance at $150 already breached in pre-market, next stop is $155.

Diagonal Spread P&L in Bull Case:
- Stock at $155 in January: $145 calls worth ~$10, $155 April calls worth ~$3-4 = significant profit
- Stock at $165 in April: Both legs deep ITM, maximum profit scenario (likely 60-80% ROI)

🎯 Base Case (45% probability)

Target: $148-$155 range (CONSOLIDATION WITH UPWARD BIAS)

Most likely scenario:
- ✅ Solid Q4 holiday execution meeting +2-3% comp guidance (not spectacular, but fine)
- 📱 Q4/FY26 earnings in-line with raised guidance ($4.63-4.66 EPS range achieved)
- ⚖️ FY27 guidance conservative to slightly positive (normal seasonality)
- 🏪 Store expansion progressing as planned (130 stores FY26)
- 🌍 International stays strong (+5-7% range) but doesn't accelerate dramatically
- 🔄 Stock consolidates between $148-155 range through January, then grinds toward $155 by April
- 💤 Volatility moderate - no huge surprises either direction

This is the "steady execution" scenario: Stock trades in the $148-155 range implied by options market, capturing Q4 strength and Q1 2026 growth without fireworks. The $145 January calls remain profitable but not explosive, while $155 April calls approach at-the-money by expiration.

Why 45% probability: TJX is a consistent compounder - not prone to huge surprises. Q3 beat validates thesis but doesn't require acceleration. Off-price model is proven, execution track record strong. Most likely path is "boring upward grind" as store expansion and international growth compound.

Diagonal Spread P&L in Base Case:
- Stock at $150-153 in January: $145 calls worth $5-8, modest profit or break-even
- Stock at $153-155 in April: $155 April calls worth $1-3, combined position modest profit (20-30% ROI)

📉 Bear Case (15% probability)

Target: $135-$145 (PULLBACK TO SUPPORT)

What could go wrong:
- 😰 Q4 holiday sales disappoint - comps toward +2% low-end or miss guidance entirely
- 🚨 Tariff escalation faster than TJX can offset through sourcing, margin compression
- ⏰ Spain expansion delayed or encounters execution challenges
- 💸 Broader consumer recession - even value retailers not immune to job losses
- 📊 Q4/FY26 earnings miss or weak FY27 guidance disappoints
- 🎯 International growth decelerates from +7% to +3-4% range
- 💰 Margin pressure from labor costs or inventory clearance
- 🔨 Break below $145 gamma support (9.7B) triggers pullback to $140, then $135

Critical support levels:
- 🛡️ $145: Major gamma floor (9.7B) - MUST HOLD or trade thesis breaks
- 🛡️ $140: Secondary support (4.7B gamma) - 4% pullback scenario
- 🛡️ $135: Deep support (2.1B gamma) - 7% correction from current levels

Why only 15% probability: TJX just beat expectations across the board, raised guidance, and is executing well. Off-price model is COUNTER-CYCLICAL - benefits from economic uncertainty and tariff volatility. International growth (+7%) provides cushion if U.S. softens. Valuation at 35x FY26 EPS is reasonable for quality compounder. Multiple negative catalysts would need to align.

Diagonal Spread P&L in Bear Case:
- Stock at $140-143 in January: $145 calls expire near worthless, lose $1.4M on first leg
- Stock at $140-145 in April: $155 April calls also near worthless, lose majority of $2.5M premium

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💡 Trading Ideas

🛡️ Conservative: Post-Earnings Stock Entry

Play: Buy TJX stock on any pullback to $148-149 for long-term hold

Why this works:
- ✅ Earnings risk REMOVED - Q3 beat validates execution
- 💰 Quality compounder at reasonable valuation (35x forward P/E for +9% EPS growth)
- 🌍 International expansion (+7% comps) provides multi-year growth runway
- 🏪 Store expansion to 7,000 locations (from 5,085) drives long-term upside
- 🛡️ Defensive business model - off-price benefits from economic uncertainty
- 💵 1.16% dividend yield provides downside cushion
- 📊 Strong gamma support at $145 limits downside risk

Entry strategy:
- 🎯 Buy on any dip to $148-149 (3% pullback from $151 pre-market high)
- 🛡️ Set mental stop at $144 (below $145 gamma support floor)
- ⏰ Hold through Q4 earnings (late Feb) and reassess based on FY27 guidance
- 📈 Potential upside to $155-165 over 6 months (7-13% return + dividend)

Position sizing: 5-10% of portfolio (core holding)

Risk level: Low (stock, not leverage) | Skill level: Beginner-friendly

Expected outcome: Capture continued off-price sector strength with limited downside risk, participate in store expansion story.

⚖️ Balanced: Copy The Diagonal Spread (Smaller Size)

Play: Replicate the institutional diagonal call spread at reduced scale

Structure: Buy $145 January calls + Buy $155 April calls (same strikes/expirations as the $2.5M trade)

Why this works:
- 🤝 Essentially "copying" smart money positioning at same strikes/dates
- 📅 Two different time horizons capture both Q4 strength AND Q1 2026 growth
- 🎯 $145 calls already in-the-money with stock at $151 (instant profit cushion)
- 🚀 $155 calls provide extended upside exposure through Q4 earnings
- ⏰ 58 days (Jan calls) and 149 days (April calls) gives time for catalysts to play out
- 💰 Defined risk - know maximum loss upfront

Estimated cost (adjust for current prices post-gap):
- 📊 $145 January calls: ~$6-8 per contract (stock now $151, was $145 when trade placed)
- 📊 $155 April calls: ~$4-6 per contract
- 💵 Total cost: ~$10-14 per diagonal spread ($1,000-1,400 per 1-contract spread)

Example position:
- Buy 5 contracts $145 Jan calls @ $7 = $3,500
- Buy 5 contracts $155 April calls @ $5 = $2,500
- Total investment: $6,000

Profit scenarios (5-contract example):
- 📈 Stock at $155 by January: Jan calls worth $10 (+$1,500), April calls worth $3-4 (breakeven) = ~$1,500-2,000 profit (25-33% ROI)
- 🚀 Stock at $165 by April: Jan calls exercised/sold for $20 (+$6,500), April calls worth $10 (+$2,500) = ~$9,000 profit (150% ROI)
- 📉 Stock at $145 by April: Both legs expire near worthless = -$6,000 loss (100% of premium)

Risk management:
- 🎯 Only risk 2-5% of portfolio (this is directional speculation)
- ⏰ Plan exit strategy: Take profits on Jan calls if stock hits $155 by early January
- 🔄 Consider rolling April calls forward if thesis still intact but need more time
- ❌ Exit entirely if stock breaks below $145 support convincingly

Risk level: Moderate (defined risk, bullish directional) | Skill level: Intermediate

🚀 Aggressive: Bull Put Spread - Sell Premium Into Strength

Play: Sell bull put spread betting stock stays above $145 support through January

Structure: Sell $145 puts, Buy $140 puts (January 16 expiration - same as diagonal spread first leg)

Why this could work:
- 💰 Sell elevated IV: Post-earnings volatility creates rich put premiums
- 🎯 Defined risk spread: $5 wide = $500 max risk per spread
- 🛡️ Gamma support: Selling at $145 where there's massive 9.7B gamma floor
- ✅ High probability: Stock needs to stay above $145 (only 4% pullback from $151 current) = ~65-70% probability of profit
- 📊 Time decay works FOR you: Theta burns puts down as expiration approaches
- 🎢 Earnings volatility crush: IV will decline over coming weeks, helping position

Estimated P&L (adjust after seeing current post-earnings option prices):
- 💵 Collect ~$2-3 net credit per spread
- 📈 Max profit: $200-300 if TJX above $145 at January expiration
- 📉 Max loss: $200-300 if TJX below $140 (defined and limited)
- 🎯 Breakeven: ~$142-143
- ⚡ Risk/Reward: ~1:1 but with 65-70% probability of profit (positive expected value)

Entry timing:
- ⏰ Wait 1-2 days for post-earnings volatility to stabilize
- 🎯 Enter if stock trading $149+ (gives room to work down to $145)
- ❌ Skip if stock already below $147 (too close to short strike)

Why this is aggressive:
- ⚠️ Selling naked-ish puts: If stock crashes below $140, you own it at $145 (need capital)
- 💸 Tariff wildcard: Unexpected tariff escalation could gap stock down
- 📊 Q4 guidance cautious: +2-3% comps implies some uncertainty
- 🎢 Limited upside: Max profit capped at premium collected, unlimited risk if holding stock

CRITICAL WARNING - DO NOT attempt unless you:
- ✅ Understand put spread mechanics and assignment risk
- ✅ Have capital to be assigned 100 shares at $145 if spread goes against you
- ✅ Accept that even with 65-70% win rate, losses hurt more than wins feel good
- ✅ Can monitor position and close early if stock approaches $145
- ⏰ Plan to close at 50% max profit (take $100-150 when available, don't be greedy)

Position sizing: Risk only 3-5% of portfolio (sell 3-5 spreads maximum)

Risk level: MODERATE-HIGH (short premium, assignment risk) | Skill level: Advanced

Probability of profit: ~65-70% (stock needs to stay above $145)

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⚠️ Risk Factors

Don't get caught by these potential landmines:

• 🎢 Post-earnings gap up risk: Stock gapped 3.89% to $151 in pre-market - might be overbought short-term. Any profit-taking could create 3-5% pullback toward $145-147 range even if fundamentals remain strong. The diagonal spread buyer got in BEFORE the gap, so they have cushion retail traders entering now don't have.

• 💸 Tariff escalation uncertainty: Guidance assumes current tariff levels remain stable. Any increase above 10% China tariffs could compress margins faster than TJX can offset. Inventory increased to $7.4B as hedge - if demand softens, clearance markdowns could pressure profitability. However, management believes tariffs create buying opportunities through distressed inventory.

• 📉 Q4 guidance implies deceleration: Q4 comp sales guidance of +2-3% is notably slower than Q3's +5% beat. This signals potential consumer demand softening or tougher comparisons. If Q4 comes in toward +2% low-end, market could be disappointed despite raise in full-year guidance. Holiday season execution is CRITICAL.

• 🌍 International expansion profitability uncertain: While TJX International posted impressive +7% comps, international margins are typically lower than U.S. divisions. Spain entry represents execution risk - new market entry always carries integration challenges. Could take years to achieve U.S. margin levels.

• ⚖️ Competitive pressure from Burlington, Ross: Burlington's aggressive expansion (targeting 2,000 stores from 1,000) and Ross Stores' consistent performance pose market share threats. Off-price sector growing but competition intensifying. TJX has scale advantage but can't take share gains for granted.

• 📊 Valuation at 35x forward P/E leaves limited margin of error: At $151 and EPS guidance of $4.63-4.66, TJX trades at ~32-33x forward P/E. This is reasonable for quality compounder but not cheap. Any guidance miss or FY27 deceleration could trigger 10-15% multiple compression back to $135-140 range.

• 💰 Margin expansion limited: Pretax margin guidance of 11.6% for FY26 is only 0.1 point improvement despite +4% comp sales growth. This suggests pricing power limited and cost inflation (labor, real estate) persistent. If comps slow but costs don't, margins could contract rather than expand.

• 🎯 Gamma ceiling at $150 already breached: The 18.3B call gamma resistance at $150 was THE major technical barrier, but post-earnings gap to $151 has blown through it. This is bullish for continuation, but also means there's less defined resistance until $155. Could see choppy action $148-155 as market digests gains.

• 🏪 Store expansion execution risk: Target of 1,900+ additional stores (reaching 7,000 total from 5,085 today) requires sustained capital investment, site availability, and execution. Real estate costs rising, labor expenses elevated. Any slowdown in new store productivity or delays would pressure growth narrative.

• 💔 Consumer preference shift to e-commerce: While TJX's "treasure hunt" in-store experience has proven resilient, younger consumers' evolving shopping habits could reduce foot traffic over time. Physical retail faces long-term structural headwinds despite off-price outperformance.

• 🚨 Diagonal spread timing risk: The institutional buyer got in at $145 BEFORE the 3.89% earnings gap. Retail traders copying this now at $150-151 have much less profit cushion on the $145 January calls (already $5-6 ITM for them, vs. at-the-money entry). The $155 April calls still have same risk/reward profile.

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🎯 The Bottom Line

Real talk: Someone just bet $2.5 MILLION that TJX's post-earnings rally is just getting started, using a sophisticated diagonal call spread to capture both near-term Q4 strength AND extended Q1 2026 momentum. This isn't a "get rich quick" speculation - it's a calculated institutional bet on sustained execution from the world's largest off-price retailer.

What this trade tells us:
- 🎯 Smart money sees TODAY'S earnings beat (5% comps, guidance raise) as validation, not the end of the story
- 💰 They're positioning for $145→$155 move over next 5 months (6.9% upside from entry, already 3-4% realized)
- ⚖️ The diagonal spread structure shows they expect STEADY gains, not explosive moves - perfect for TJX's consistent compounder profile
- 📊 Timing immediately AFTER earnings removes binary risk while capturing momentum from beat
- ⏰ January + April expirations bracket Q4 holiday season AND Q4/FY26 earnings, capturing two major catalysts

This is NOT a "chase the gap" trade - it's a "ride the wave of execution" position.

If you own TJX stock:
- ✅ HOLD and add on any dip to $148-149 - earnings beat validates thesis
- 📊 Set mental stop at $144 (below $145 gamma support) to protect gains
- ⏰ Hold through Q4 earnings (late Feb) - management guidance suggests strong holiday season ahead
- 🎯 Upside targets: $155 by January (base case), $160-165 by April (bull case)
- 💰 You're sitting on 21-26% YTD gains - don't get shaken out by normal 3-5% volatility

If you're watching from sidelines:
- ⏰ Missed the perfect entry (institutional buyer got in at $145 pre-gap), but story still intact
- 🎯 Wait for any pullback to $148-149 for stock entry (3% dip from $151 pre-market high)
- 📈 For options players: $145 January calls now expensive ($6-8 ITM), but $155 April calls still offer good risk/reward
- 🚀 Confirmation signals: Q4 comp sales +2.5%+ (mid-range or better), Spain entry progress, international comps staying +6-7%
- ⚠️ Red flags: Stock breaks below $145 support, Q4 guidance cut, tariff escalation crushing margins

If you're bearish:
- 🎯 Fighting TJX right after earnings beat and all-time high is DANGEROUS
- 📊 First support at $145 (massive 9.7B gamma), major support at $140 (4.7B gamma)
- ⚠️ Better to wait for failed breakout above $155 or break below $145 support before shorting
- 📉 Bear thesis requires multiple negatives: tariff shock + consumer recession + international slowdown
- ⏰ Patience required - let momentum play out before fighting the tape

Mark your calendar - Key dates:
- 📅 November 21 (Friday) - Weekly/Monthly OPEX (±1.85% implied move already realized from earnings gap)
- 📅 December 19 - Quarterly triple witch (±4.14% implied move)
- 📅 Early January 2026 - Spain T.K. Maxx store openings expected
- 📅 January 16, 2026 - Monthly OPEX, expiration of $145 diagonal spread first leg
- 📅 Late February 2026 - Q4 FY26 / Full Year earnings report (MAJOR catalyst)
- 📅 April 17, 2026 - Monthly OPEX, expiration of $155 diagonal spread second leg

Final verdict: TJX's off-price retail model is PERFECTLY positioned for the current environment - tariff uncertainty creates buying opportunities, economic caution drives value-conscious consumers, and international expansion (+7% comps) provides sustained growth runway. The Q3 earnings beat (5% comps vs. 3.7% expected, EPS $1.28 vs. $1.23) validates execution, while raised FY26 guidance ($4.63-4.66 EPS, +9% YoY) signals confidence. The $2.5M diagonal call spread is a CLEAR signal: institutions are positioning for $145→$155 rally over next 5 months, betting on holiday strength + Q4 earnings beat + international acceleration.

For retail traders: The train has left the station at $145, but it's not too late to board at $148-151. Just know you're paying a premium to ride momentum rather than getting the institutional entry price.

Off-price retail is entering a "golden age" - and TJX is the undisputed king. 👑

Disclaimer: Options trading involves substantial risk of loss and is not suitable for all investors. This analysis is for educational purposes only and not financial advice. Past performance doesn't guarantee future results. The 448x unusual score reflects this trade's size relative to recent TJX history - it does not imply the trade will be profitable or that you should follow it. Always do your own research and consider consulting a licensed financial advisor before trading. Diagonal spreads require understanding of multi-leg options strategies and Greeks. Post-earnings volatility creates additional risks for traders entering after the gap. The institutional buyer achieved $145 entry before 3.89% gap - retail entries at $150-151 have different risk/reward profiles.

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About The TJX Companies: TJX Companies is the leading off-price retailer of apparel, accessories, and home merchandise globally, operating T.J. Maxx, Marshalls, HomeGoods, Sierra, and international banners across 5,085+ stores, with a market cap of $162.02 billion in the Retail-Family Clothing Stores industry.