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Will Dollar General see more gains?

David Russell (david.russell@optionmonster.com)

The bulls think Dollar General will keep on running.

optionMONSTER's Heat Seeker monitoring system detected the purchase of 2,500 June 55 calls for $0.98 and the sale of an equal number of May 52.50 calls for $0.53. Volume was below open interest in the May contracts, which indicates that an existing long position was closed and rolled to the higher strike.

The investor paid $0.45 and now has an additional month of upside exposure to the discount retailer. Adjusting the position today spared him or her from losing money at an accelerating pace as expiration approaches on Friday. (See our Education section for more on how time affects the value of options.)

DG is down 0.3 percent to $52.64 in morning trading. The stock doubled between early 2011 and last summer, pulled back to $40, and has been regaining its momentum this year. The last earnings report in March beat expectations, and the next set of results is due early next month.

Total option volume is twice the daily average in DG so far today, with not a single put trading so far.

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