Hi All,

DG seems to be a solid company, but no one seems to have an idea of how long it might take to recover (or get to Jim's predicted $200 price). One way to entertain yourself and make money while waiting is to write cash-secured puts, and just keep writing them as they expire. The volatility is making this attractive, and you can but a longer term OTM call to profit highly if it goes up fast.

On the cash-secured put front, DG currently trading at 117.97:

Date     Strike  %ITM    Cash Req'd  Target       %return  Annualized  Income/Contract  Days to Go  DG FOMO
 Oct-23  120     -1.72%   $ 114.40    $     5.60  4.90%    36.15%       $       560.00  36          125.6
 Nov-23  120     -1.72%   $ 113.80    $     6.20  5.45%    22.58%       $       620.00  64          126.2
 Jan-24  120     -1.72%   $ 110.40    $     9.60  8.70%    20.90%       $       960.00  127         129.6

So if you are willing to park your money for the next 36 days, you should be able to sell the October 120 PUTS for $5.60/share, with a potential return of 4.9% (36% annualized). Should DG drop below 114.40 on the sell date, you will lose money, and if it shoots above 125.6, you would have been better off owning the stock.

What do you guys think?

--G

Berkshire Hathaway FAQ

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