Every year around this time, big-box retailers get their moment in the spotlight. 

Wall Street waits for holiday numbers to roll in while the media trots out footage of shoppers at dawn, stampeding through automatic doors, clawing over TVs and toaster ovens. 

But this year, the vibe is … different. 

Consumer confidence isn’t just cooling off — it’s sagging like an old couch that’s been through too many moves. 

The University of Michigan’s Consumer Sentiment Index is at 50.3 for November, marking a multi-year low.

At the same time, credit card debt just hit a record high of $1.23 trillion, according to the New York Fed. 

I guess buy-now-pay-later has turned into pay-never-maybe. 

Even people with money are acting tight, and you can feel the pressure building on big retailers like Target.

The company, which reported earnings Wednesday, announced net sales are down 1.5% from time last year, and it lowered its full-year profit guidance.   

Not exactly a ringing endorsement of the holiday shopping season. 

So how do you trade it?

This is where options can give you an edge.

Not on Target

Most traders treat earnings season like roulette by buying short-term calls or puts and hoping for a big move. 

Maybe they get lucky, but guessing isn’t trading. 

When I see consumer sentiment rolling over like this and retailers like Target showing signs of weakness, I look further out. 

Not just to this quarter’s earnings, but the bigger picture. 

Are we in the middle of a structural shift in consumer spending? Could this weakness extend into Q1 ’26, maybe even Q2?

If the answer is yes — and right now, it could be — then I’m not looking to scalp weekly puts. 

I’m building trades with time and looking for bearish calendars, or longer-dated vertical spreads that give me room to be right without needing an immediate crash.

You don’t have to chase the headline. 

Most of the retail names are still overpriced relative to the risk they’re carrying. 

An Even Better Buy? 

Best Buy is another name on my radar. 

Electronics aren’t high on anyone’s shopping list right now, especially with inflation eating into discretionary income. 

If they disappoint next week, you’re going to see option IV collapse, and anyone holding expensive front-month premium is going to get crushed. 

But a well-placed debit put spread with 45-60 days until expiration? That’s a weapon.

Here’s what too many retail traders forget: Timing isn’t just about direction, it’s about decay. You can be totally right and still lose money if your trade runs out of time. 

That’s why I structure trades that give me breathing room, and I never bet the farm on a single earnings event.

And if you’re thinking about going long retail stocks here because “they’re cheap” — look again. 

Cheap can get cheaper. And unless you see a true inflection in consumer spending, it’s hard to justify stepping in front of this train.

Context Is Helpful

Back in 2007, right before the financial crisis hit, we saw a similar setup. 

Consumers started pulling back quietly, retailers began missing quietly, and everyone shrugged. 

Until the bottom fell out. 

I’m not saying we’re headed there again, but the clues are stacking up.

So keep your trades smart, give them time, and stay focused on what the data is telling you, not the headlines.

Stay Street Smart,
Jeff Zananiri