Target (TGT) reported stronger-than-expected sales results for March and raised their earnings guidance this week, a one-two punch for the Target bears. And there are a lot of them out there. Investors have been lowering their expectations for TGT as its earnings report approaches in early May, and lower expectations make it easier to impress the Street.

TGT is already beginning to outperform, and the many bears (we’re seeing heavy put buying and short open interest) will have to start covering their bearish bets and begin buying the stock. We like this setup to drive the price of TGT toward $60 between now and its earnings report on May 10.

Buy the TGT May 57.50 Calls (TJB   100522C00057500), which are currently trading for around $1 per contract. If the price of TGT were to run to $60 before the company’s earnings announcement, this option would be worth at least $2.50, or a 178% profit! (Learn more about this earnings trade.)

Earning season will be packed with profit opportunities like this, and we want you to make the most of them. So we’re going to share five tips — we call them our rules of engagement — for trading earnings. Keep reading to find out how to land the big bucks this earnings season.

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