Options Intelligence Reports: Dollar General Corp. (DG) & Cracker Barrel Old Country Store, Inc. (CBRL)

---

Put Sellers Target Dollar General Corp.  

DG ñ Dollar General Corp.
Shares in Dollar General Corp. rallied as much as 4.1% this afternoon to touch an intraday- and new 52-week high of $32.23 after fellow discount retailer, Dollar Tree, reported better-than-expected third-quarter earnings this morning. Dollar General appeared on our scanners after bullish players sold out-of-the-money put options in the December contract. Put sellers are suggesting shares in DG are likely to trade above $30.00 through expiration day next month. Dollar General reports third-quarter earnings ahead of the opening bell on December 9, 2010.


                                       


Options traders sold more than 14,200 puts at the December $30 strike to pocket an average premium of $0.18 per contract. Put sellers keep the full premium received on the transaction as long as DGís shares exceed $30.00 through December expiration. More than 16,000 put options changed hands at the December $30 strike versus paltry previously existing open interest of just 7 contracts at that strike. Overall options volume of 16,535 contracts generated on Dollar General today is far greater than total existing open interest on the stock of 10,451 lots before today. Options implied volatility on Dollar General is down 8.5% to arrive at 23.88% in late afternoon trading.


ADVERTISEMENT
 

CBRL ñ Cracker Barrel Old Country Store, Inc.
Near-term call options are in demand on the operator of retail and restaurant concept chain, Cracker Barrel, this afternoon. Shares in Cracker Barrel jumped 3.00% to $57.77, a new 52-week high for the stock, by 3:45 pm in New York. It looks like call buyers populating CBRL today expect shares to extend gains following the firmís first-quarter earnings report before the opening bell tomorrow.

Bulls scooped up roughly 1,100 calls at the December $60 strike for an average premium of $0.735 per contract. Investors holding these contracts are prepared to make money should shares in Cracker Barrel rally another 5.1% to surpass the average breakeven price of $60.735 ahead of December expiration. Options implied volatility on the stock is up 8.2% to stand at 31.24% on rising demand for options and the impending earnings release. 

--------------------------------------------------------------------------------------

Note: The material presented in this commentary is provided forinformational purposes only and is based upon information that isconsidered to be reliable. However, neither Interactive Brokers LLC norits affiliates warrant its completeness, accuracy or adequacy and itshould not be relied upon as such. Neither IB nor its affiliates areresponsible for any errors or omissions or for results obtained from theuse of this information. Past performance is not necessarily indicativeof future results.

This material is not intended as an offer or solicitation for thepurchase or sale of any security or other financial instrument.Securities or other financial instruments mentioned in this material arenot suitable for all investors. Any opinions expressed herein are givenin good faith, are subject to change without notice, and are onlycorrect as of the stated date of their issue. The information containedherein does not constitute advice on the tax consequences of making anyparticular investment decision. This material does not take into accountyour particular investment objectives, financial situations or needsand is not intended as a recommendation to you of any particularsecurities, financial instruments or strategies. Before investing, youshould consider whether it is suitable for your particular circumstancesand, as necessary, seek professional advice.


"

---

View Andrew Wilkinson's post archive >