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With the company's quarterly report slated for release tomorrow morning, discount retailer Family Dollar Stores Inc. (FDO) has seen its implied volatility spike to a three-month high in recent weeks. The stock's Schaeffer's Volatility Index (SVI) tagged an annual low of 32% on March 23, but this reading has since soared 25% to its current perch at 40%. For a point of comparison, FDO's one-month historical volatility currently arrives at 15.14%.
Checking in with data from the Chicago Board Options Exchange (CBOE) and International Securities Exchange (ISE), we find that activity among options traders is leaning toward the bullish end of the spectrum. Specifically, the equity's 10-day ISE/CBOE call/put volume ratio has ballooned to 3.60, meaning that calls bought to open have more than tripled puts purchased during the prior two weeks. This ratios also ranks above 78% of all those taken in the past year, indicating that options traders have only snatched up calls at a faster pace than puts 22% of the time in the prior 52 weeks.