Sell Dollar General (NYSE: DG) Puts for 27% Gain

By Linda McDonough • May 31, 2018

Sell to close the August 17, 2018 put on Dollar General (NYSE: DG) with a strike price of $95 at $6.50 or higher. Symbol (DG180817P95)

Dollar General missed earnings and sales estimates this morning. Weak customer traffic and a shift away from more profitable product categories dampened earnings. Inventory is high at stores, a risk to future disappointments.

Although management is keeping guidance for the year, the stock is down 6% and the puts up 27% since my recommendation.

The company has a conference call at 10 AM today, which may inspire further weakness but I suggest booking the gain.

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MODERATOR: Lisa G

05/31/18 ‐ 9:43am ET May 31, 2018 at 9:43am ET

Sold for $7.58. Decided not to wait until after the conference call. Thanks Linda!

Asjad Shamim

05/31/18 ‐ 9:50am ET May 31, 2018 at 9:50am ET

Sold @ $7.10

Thanks Linda 🙂

Abhi A

05/31/18 ‐ 10:06am ET May 31, 2018 at 10:06am ET

Sold at 7.60. Thanks Linda.

Phil L.

05/31/18 ‐ 10:09am ET May 31, 2018 at 10:09am ET

Sold at 7.40

Thanks Linda

Chris Stubbs

05/31/18 ‐ 10:52am ET May 31, 2018 at 10:52am ET

Thanks Linda
Booked 28% profit

Phil Ash

05/31/18 ‐ 11:09am ET May 31, 2018 at 11:09am ET

Sold @$7.10 just now. 38.3% in 50 days. Thanks

Mark F

05/31/18 ‐ 11:19am ET May 31, 2018 at 11:19am ET

Sold @ $7.32 for a 39.8% gain.

KenRetiredSCAZ

05/31/18 ‐ 12:12pm ET May 31, 2018 at 12:12pm ET

I don’t understand how you are arriving at your rate of return percentages? I bought DG @ $420 per contract and sold it this morning @ $730 per contract. That gives me a $310 profit per contract. Here’s where I arrive at my return on investment of 73.8% Profit $310 divided by $420 cost = .73809. I don’t understand how you are arriving @ 27% ? ? Anyway the dollar amount is what’s important, but I would better like to understand the percentages as well. . .thanks for listening

Mark F

05/31/18 ‐ 12:42pm ET May 31, 2018 at 12:42pm ET

Linda’s original recommendation was buy @ 5.30. Her alert today was sell @ 6.50. If you bought much lower and sold higher you have a better % gain than her.

MODERATOR: Lisa G

05/31/18 ‐ 12:45pm ET May 31, 2018 at 12:45pm ET

Wring equation. Should be (730-420)/420.

Ted

05/31/18 ‐ 1:05pm ET May 31, 2018 at 1:05pm ET

Read again – That is the equation he used 🙂
Nice return Ken!

Linda McDonough

05/31/18 ‐ 2:26pm ET May 31, 2018 at 2:26pm ET

Also, for math geeks- a great shortcut for returns is exit price/entry price – 1 or 730/420-1. Just removes a step.
Linda

MODERATOR: Lisa G

05/31/18 ‐ 12:50pm ET May 31, 2018 at 12:50pm ET

I’m on my phone and chat type and do calculation at same time! You paid less than original recommendation so your return is much higher.

Linda McDonough

05/31/18 ‐ 2:25pm ET May 31, 2018 at 2:25pm ET

Hi Ken,
The comments above are correct. When calculating hypothetical returns I am bound to the entry and exit points when I suggest the trade. Believe me, I am kicking myself for not waiting to sell these today but my ultimate goal is to help all of you subscribers make money so congrats on your well-timed trade!
Best,
Linda

MODERATOR: Lisa G

05/31/18 ‐ 5:02pm ET May 31, 2018 at 5:02pm ET

Linda,

I am confused as you said you were kicking yourself for not waiting to sell these today. Didn’t the alert to sell come out today? Or am I missing something?

Lisa

Linda McDonough

05/31/18 ‐ 5:40pm ET May 31, 2018 at 5:40pm ET

Lisa,
The sell alert did come out this morning but the puts were trading at a lower level. If I had waited a bit I could have helped some get a higher price. Alas, it is nearly impossible to time these perfectly.
Linda

MODERATOR: Lisa G

05/31/18 ‐ 7:08pm ET May 31, 2018 at 7:08pm ET

Linda,

Yes, it is impossible to time these. But I had a good return. I had gotten in at 4.70 and sold for 7.58 so ~62%. And I sold them pretty much as soon as you put the alert out.

Lisa

Paul

05/31/18 ‐ 1:01pm ET May 31, 2018 at 1:01pm ET

Sold for $7.43 at Fidelity. Thank You Linda.

Toro

05/31/18 ‐ 1:17pm ET May 31, 2018 at 1:17pm ET

Sold at 7.71 at Fidelity..

Had a limit order at 7.50, which miraculously filled at 7.71. I bought at 5.10 so a gain of 49.62 % after commissions.

Thank you Linda.

KenRetiredSCAZ

05/31/18 ‐ 2:06pm ET May 31, 2018 at 2:06pm ET

Thank you all for listening and adding your input. I guess at 71 I still remember how to make equations using very basic algebra? !

MODERATOR: Lisa G

05/31/18 ‐ 5:01pm ET May 31, 2018 at 5:01pm ET

No you were fine. I could not look at your post, type and have the calculator up all at the same time on my phone. Just shows me I shouldn’t post from my phone!

Wallace Rodriguez

06/01/18 ‐ 5:08am ET June 1, 2018 at 5:08am ET

BTo @ $4.38 – SCT @ $6.95 = Gain $2.57 = 58.58% – in 5 weeks! = THANKS!!!!!!!!!!!!!

jake

06/01/18 ‐ 6:21am ET June 1, 2018 at 6:21am ET

Sold DG @ 7.50..Thanx Linda !!

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