IB Options Brief: Dollar Tree Stores, Inc. (DLTR) & Chico's FAS, Inc. (CHS)

Posted May 14th, 2012 by Caitlin Duffy in Unusual Activity

DLTR ñ Dollar Tree Stores, Inc.
Bearish options are in play on Dollar Tree, Inc. this morning ahead of the discount consumer goods retailerís first-quarter earnings report on Thursday. Shares in Dollar Tree are currently down 1.5% at $101.05 as of 12:50 in New York. It looks like the investor buying a sizable debit put spread on DLTR this morning paid an average net premium of $3.31 per contract for a roughly 3,000-lot June $85/$100 spread. The position makes money if shares in Dollar Tree fall 4.3% to breach the average breakeven price of $96.69, while maximum potential profits of $11.69 are available in the event that shares plunge 15.9% to settle below $85.00 at expiration next month.

CHS ñ Chicoís FAS, Inc.
Options on the retailer of casual womenís clothing and accessories attracted bullish plays on Monday morning as traders await the companyís first-quarter earnings report on Wednesday. Shares in Chicoís are bucking the broad market decline today, trading up 1.8% at $14.67 as of 12:30 pm ET. In-the-money call buyers in the May expiry are ready to profit should shares in the retailer extend gains ahead of expiration. It looks like one or more players snapped up 1,600 calls at the May $14 strike for an average premium of $0.90 apiece. Call buyers make money if shares in the name rally another 1.6% to top the breakeven price of $14.90. Shares in the apparel retailer touched a six-month high of $16.07 as recently as May 2nd.

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