Calls Active as Dollar Tree Pops

Shares of Dollar Tree (DLTR) are popping higher this morning, currently up by 3.97%, trading at $48.93. The stock has been consolidating lower over the past three months following a massive three-year rally. Shares have not retraced this much since July-August of 2011.

With shares now sitting on the 200-day moving average, some traders are taking shots at the upside here. Overall call volume is running at 3.44x normal volume with 5,077 contracts traded.

The heaviest action is coming on the October $52.50 strike, where over 2,200 calls have traded on open interest of just 539. Blocks of calls have been purchased all morning: 938 were bought for $0.30, followed shortly after by the purchase of 757 for $0.35.

Near-term implied and historical volatility is registering 22% and 17%, respectively. At $0.35, the Oct $52.50 call traded at roughly 26% vol. 

Dollar Tree, Inc. is an operator of discount variety stores offering merchandise at the fixed price. As of January 28, 2012, the company operated 4,351 discount variety retail stores.

About Michael Zerinskas

Originally from Chicago, Michael J. Zerinskas began his career as an intern for a small high-frequency trading firm based at the CME; he then moved on to become Chief Options Strategist at Benzinga.com. Michael is now Unusual Activity Editor at The Options Insider, specializing in VIX, volatility, and flagging unusual activity.