Mike Khouw Makes A Bearish Bet On TGT

Mike Khouw gave a trade on CNBC's Fast Money that will allow an investor to buy Target Corporation TGT at lower levels. He recommends a put spread in Target (TGT), as a way to do it. Mike Khouw wants to buy July 55 put for $3, and sell two July 50 puts for $2.60. This trade would cost him $0.40, and he has to be ready to pay $50 for this stock if it drops significantly. Mr. Khouw doesn't mind buying TGT at $50, because he would be paying less than 14x earnings. If TGT goes up he would lose only $0.4. Target (TGT) gained 1.60% today and closed at $56.05.