Dollar Tree Stock Surges on Beat-And-Raise

Options volume is running at nine times the intraday average

Digital Content Manager
May 26, 2022 at 10:16 AM
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Dollar Tree, Inc. (NASDAQ:DLTR) is surging today, up 17.7% to trade $157.25 at last check, after the discount retailer posted better-than-expected first-quarter earnings and revenue, with a comparable-store sales jump that doubled analyst estimates. What's more, the company raised its sales forecasts as consumers seek bargains due to surging inflation.

The security is bouncing off the $126 level, after pulling back from an April 21, all-time high of $177.19. Today's pop also has shares breaking through resistance from the 20-day moving average, which had been pressuring the equity lower since late April. Over the last nine months, DLTR has added 68.4%.

Analysts have yet to chime in, but are already optimistic towards Dollar Tree stock. Of the 19 in question, 11 call the security a "buy" or better, while the remaining eight say "hold" or worse. 

A shift in the options pits could keep the tailwinds blowing for the equity. This is per DLTR's 10-day put/call volume ratio of 1.22 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 84% of annual readings, suggesting there has been a healthier-than-usual appetite for puts of late.

Drilling down to today's options activity, 4,356 calls and 6,702 puts have crossed the tape in just the first half hour of trading, which is nine times the usual intraday amount. Most popular is the 5/27 75-strike put, followed by the 155-strike put in the same weekly series.

In addition, the security's Schaeffer's Volatility Scorecard (SVS) ranks at an elevated 99 out of 100, indicating DLTR has exceeded option traders' volatility expectations in the past year.


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