by Houghton and Atkeson 09/24/08
Family Dollar Stores, Inc. (FDO) is scheduled to report earnings next week on Friday before the market open.
With earnings a little over a week away, option investors are buying about 7,500 contracts of the FDO Nov 25 (FDOVE) and 22.50 (FDOVX) Puts.
The stock is up about 40% year-to-date on strong fundamentals. Is this a warning that those fundamentals are eroding or is it a simple case of hedging long positions?
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We are taking notice of these trades today because in the past, when puts were sold, the stock went up. Today, puts are being bought. It seems as if this put trader knows what he is doing.
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