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Options Action: Dollar General

Dollar General landed on the trader radar Wednesday after the company missed Street expectations, with price cuts dragging down margins.

For Dollar General, which prices most of its merchandise below $10, the weak economy is a double-edged sword.

As shoppers seek more affordable food and other basic goods, a soft economy drives customers into its stores.

But to retain those customers, the company must keep prices low, which is difficult when, as now, costs are rising.

Considering the dichotomy, how should you trade this stock? Don’t make a move until you hear from Mike Khouw of Cantor Fitzgerald.

Watch the video now!







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Trader disclosure: On June 1, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s “Fast Money” were owned by “Fast Money” traders; Accounts Managed by Brian Kelly Capital own (ANDE) calls; Accounts Managed by Brian Kelly Capital own (BHP); Accounts Managed by Brian Kelly Capital own (IAU); Accounts Managed by Brian Kelly Capital own (NLY); Accounts Managed by Brian Kelly Capital own (NEM); Accounts Managed by Brian Kelly Capital own (TLT) calls; Accounts Managed by Brian Kelly Capital own Aussie dollar; Accounts Managed by Brian Kelly Capital own Canadian dollar; Accounts Managed by Brian Kelly Capital own Swiss franc; Accounts Managed by Brian Kelly Capital own Hong Kong dollar; Accounts Managed by Brian Kelly Capital own Mexican peso; Accounts Managed by Brian Kelly Capital own Swedish krona; Accounts Managed by Brian Kelly Capital are short yen; Terranova owns (XOM); Terranova owns (KSS); Terranova owns (CVI); Terranova owns (OXY); Terranova owns (TM); Terranova owns (BJ); Terranova owns (DIS); Terranova owns (PFE); Terranova owns (V); Terranova owns (HPQ); Terranova owns (FLX); Terranova owns (JPM); Terranova owns (MCD); Terranova owns (PEP)
Terranova owns (VRTS); Terranova is short (DELL)

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MIke Khouw
*No Disclosures

Joe LaVorgna
* No Disclosures



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