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February 10, 2009  Tue 11:43 AM CT

FDO: SEE CHART GET CHAIN FIND STRATEGIES

Family Dollar Stores Chart

Family Dollar Stores saw a large, potentially bullish trade today as one of its chief competitors announces strong quarterly revenues and expansion plans.

As FDO holds roughly flat at about $27.30 in midday trading despite the broader market selloff, one options player has apparently sold a huge block of 11,898 puts at the March 22.5 strike for $0.30 against open interest of only 84, according to optionMONSTER's tracking systems.

As sold puts, they would generate a profit if FDO is above $22.80 at the March expiration. Below that level, this trader would be required to buy stock for $22.50.

Like other Dollar Tree and other discount retailers, Family Dollar has fared better than higher-priced chains during this economic downturn in what has been called the "Depression Trade." This morning privately held Dollar General reported a rise in fourth-quarter sales and said it plans to open new stores.

(Chart courtesy of trade MONSTER)

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