Call Spread Purchased on Dollar Tree (DLTR)
Shares of Dollar Tree (DLTR) are trading lower on the session by 0.27%, at $39.25. The stock has been running lower over the past two weeks after the company issued a cautious tone for it’s Q3 earnings, which are scheduled to be released on November 15th.
One trader is taking advantage of the weakness in DLTR by buying upside call spreads. A short while ago the November $42.50/43.75 call spread was purchased 5,000 times for between $0.24-0.25.
Given current open interest on both strikes, 1,179 and 1,256 contracts respectively, this is clearly new positioning.
30-day implied volatility is up 2.4% today to 34.91%; 10-day historical vol is holding steady at 51.59%.
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.
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