Dollar Tree is at a new all-time high, and investors are taking
optionMONSTER's tracking systems detected the sale of more than
2,800 November 85 calls for $1.80 to $1.85. Volume was 9 times
greater than open interest in the strike.
The trader probably owns shares in the discount retailer and wrote
to earn income
while holding the position. That reduces their cost basis and thus
reduces their risk of loss if the shares were to drop. It also
obligates them to sell DLTR for $85 if it closes at or above that
level on expiration. But including the premium earned, their exit
price would be $86.80-$86.85. (See our
DLTR is up 1.41 percent to $80.42 and is up 44 percent so far this
year. It's been riding a wave of strong demand and investor
enthusiasm, especially after rival 99 Cents Only Stores agreed to a
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.
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