Consumers continue to spend more money with online retailers, and use brick-and-mortar outlets as a place to test products and comparison shop. Last week The Wall Street Journal reported on troubles facing consumer electronics giant Best Buy (NYSE: BBY) in its article “Forecast for Best Buy: Worst Is Yet to Come.” The Journal noted that online retailer Amazon.com Inc. (NASDAQ: AMZN) is finding great success from this continued consumer migration away from traditional stores. Here’s the money quote from the article:

“Indeed, Amazon’s electronics … revenue rose 66% to $18 billion last year, helping it lift market share in different segments. Its share of LCD TV sets, for instance, nearly tripled, to 3.7% at the end of 2010 from 1.3% in 2007, estimates research firm Traqline. Its share of portable audio devices rose to 11% from 4.6% in the same period. A key to that success is that Amazon beats bricks-and-mortar retailers across the board on average electronics prices, a Wells Fargo study showed.”

The capture of more and more market share by Amazon, and the concomitant loss by Best Buy, isn’t an isolated case. Not only has Amazon grabbed market share away from booksellers such as Barnes & Noble, Inc. (NYSE: BKS), but it also continues gobbling from other big retail giants.

The consumer shift may come is shifts and starts so investors may want to look at long-term options on some of these retailers.

Here are five options trades to take advantage of the online retail migration.

Amazon.com

The most obvious way to play this trend is to go long AMZN shares. The stock currently trades around $170 per share, so Amazon bulls should check out the AMZN Apr 2011 175 Call. Amazon also has long term trading options dated January 2012 and January 2013. If you think it the it will take Amazon a little longer to dominate retail these months may be attractive. The volume isn’t large but there is some open interest in these months.

Best Buy

The other obvious trade here is to short Best Buy shares, and doing that is easy with the BBY Apr 2011 31 Put. Best Buy has the same  longer-term expiration months as Amazon – January 2012, and January 2013. Volume is light at this point but they may be worth exploring if you think Best Buy will lose market share as 2011 goes on. Best Buy faces a quandary — it will probably generate foot traffic and sales with lower prices, but that reduces the revenue it needs to hire and pay its smart sales staff, a major advantage it holds over Amazon. The danger is dropping staff and presenting itself as bookseller Borders did before it filed for bankruptcy — long aisles and few customer helpers. Last month Borders filed for bankruptcy and prepared to close about one-third of its stores. That’s a no-go.

Profit as Brick & Mortar Crumbles

eBay Inc.

The other big online retailer is eBay Inc. (NASDAQ: EBAY), and though its business model is much different than Amazon’s, a migration to more and more online buying will likely spur action in the shares. This trend might take a bit longer to develop, so look at the inexpensive EBAY Jul 2011 36 Call. The January 2012 strikes also have some open interest but little trading volume. Consider opening a position carefully in this expiration month.

Sears Holding Corp.

Another retailer that’s struggled mightily over the years is Sears (NYSE: SHLD), and it too has lost a lot of market share to online competition as well as other brick-and-mortar stores. Traders may find value in the SHLD Apr 2011 75 Put, but be careful here as the volume in this contract is fairly low. Some might argue that Sears appears to be having as much trouble finding option investors as it does customers. But don’t sell this venerable marketer short. Its market cap is north of $9 billion, and it operates more than 2,200 full-line and 1200 specialty retail stores. The company virtually invented retail marketing. The question is whether it has the chops to do it 21st century-style.

Target Corp.

Discount retailer Target (NYSE: TGT) has its own online operation, but they still stand to lose market share on electronics and other items from the behemoth that is Amazon. Options traders who think the retailer is susceptible can take a look at the TGT Apr 2011 50 Put. And Target has bigger problems than customers moving to online purchasing. Consider brick and mortar where Target’s primary competitor is Wal-Mart Stores. Ouch.

To read more option analysis and trading ideas visit Trading Strategies.

Jim Woods held no positions in any of the stocks mentioned in this article.