The Options Market's Top Retail Picks

Christmas came early this year for a number of retailers, who posted better-than-expected sales gains this October. Though the month initially got off to a slow start, when the temperature dropped, Americans turned out to shop.

Plus, the added incentive of markdowns certainly didn't hurt. Retailers habitually slash prices this time of year in order to move fall merchandise. And since consumers are big fans of immediate gratification when it comes to their discretionary purchases, they're happy to snap up clothes and other products on their way out of season, especially at bargain-bin prices.

Strong fall sales give retailers a nice little boost into the holiday season -- but can they keep the momentum going?

For clues, you may want to see how they're faring in the options market. If a stock has a Put/Call ratio below 1.0, there are less open put option contracts on these stocks than call option contracts -- meaning that the company is seeing bullish sentiment in the options market. All of the stocks in our list have Put/Call ratios below 0.3.

Thinking of adding a few retail stocks to your portfolio ahead of the holiday season? Options traders seem to think there's significant upside to these names -- what do you think? (Click here to access free, interactive tools to analyze these ideas.)

Options data sourced from Schaeffer's. The list has been sorted by the Put/Call ratio.

Interactive Chart: Press Play to see how the market caps of these stocks have changed over the last two years.

Kapitall's Eben Esterhuizen and Alicia Sellitti do not own shares of any companies mentioned.