Target (NYSE: TGT) reported Q3 net earnings of $483 million. TGT is down .92 to $52.98. TGT says: "Our third quarter earnings were disappointing due to soft sales in our higher margin categories, leading to lower-than-expected gross margin in our core retail operations." TGT call option volume of 30,415 contracts compares to put volume of 18,212 contracts. TGT December option implied volatility of 47 is above its 26-week average of 35 according to Track Data, suggesting larger risk.

Cree (NYSE: CREE), a manufacture of semiconductors for solid state lighting, is recently down 59c to $21.26. CREE has been frequently mentioned as a buyout target over the last five months. CREE December call option implied volatility is at 57; puts are at 73; above its 26-week average of 48 according to Track Data, suggesting larger price fluctuations. CREE puts are priced higher than calls because CREE is difficult to borrow.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.