Call traders are chiming in on DLTR's pop
Discount retail stock Dollar Tree Inc (NASDAQ:DLTR) was last seen up 5.2% at $70.63, after the company announced it would be selling its Family Dollar business to Brigade Capital Management, LP and Macellum Capital Management, LLC for $1 billion. The company also reported better-than-expected fourth-quarter earnings and revenue, though net sales missed estimates.
On the charts, DLTR has been middling between $60 and $80 since August, hitting a Nov. 12 four-year low of $60.49 during this time. Today's pop is testing a layer of overhead moving averages, including the 50-day and 80-day trendlines. Year-to-date, the equity is down 6.2%.
Options traders are chiming in after the news, with 25,000 calls and 15,000 puts exchanged so far -- five times the overall options volume typically seen at this point. The May 90 and 85 call contracts are the most popular, with new positions opening at the weekly 3/28 68-strike call.
Today's options activity represents a bullish shift, as puts were much more popular than usual leading up to today. This is per DLTR's 10-day put/call volume ratio of 2.09 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks higher than 98% of readings from the past year.