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)
Large trade in Family Dollar Stores
Mike Yamamoto | firstname.lastname@example.org