Show of support in Dollar General

Mike Yamamoto (mike.yamamoto@optionmonster.com)
February 19, 2014

Traders are looking for a floor in Dollar General as the discount retailer tries to rebound.

More than 5,000 March 52.50 puts have been sold for $0.36 to $0.25 this morning, according to optionMONSTER's tracking systems. The volume was well above the strike's previous open interest of 1,241 contracts, indicating that new positions were established.

These put sellers are looking for DG to stay above $52.50 through expiration in mid-March, at which time they would keep the credit as profit. But if the stock falls below that strike price, the traders would be on the hook to buy shares at that level. (See our Education section)

DG is down 1.03 percent to $57.42 this morning. The stock went into a steep slide after hitting an all-time high of $62.93 on Jan. 10, but shares have bounced twice at their 200-day moving average this month. The company has not announced the date of its next quarterly results, but last year's calendar suggests that they will come out in late March.

Today's short puts have already pushed Dollar General's total option volume past 10,500 contracts, compared to a daily average of 7,291 for the last month.

More From optionMONSTER