Buy Call WMT

October 1, 2024
Adjust Existing Position: Against WMT January 65 Calls, Sell the January 95 Calls (exp. 1/17/2025)

Despite the market being under pressure today, WMT is busting out to a new high. I really like the way this stock looks.

And while I think the odds favor WMT continuing to move higher in the months to come, just in case there is some choppiness, let’s finally turn this trade into a bull call spread by selling the January 95 calls for $0.70 (approximately).

To execute this trade you need to:
Sell to Open the WMT January 95 Calls

After this adjustment our position will be:
Long WMT January 65 Calls
Short WMT January 95 Calls

This out-of-the-money call sale today will drop our cost basis on this $30-wide bull call spread to $3.65.

I will have made a mistake selling the 95 call today if WMT trades well above 95 on January expiration, or higher by 17% from current levels. However, in that scenario, our position will close at a profit of more than 500%, which would be a heck of a profit in a slow-moving stock like WMT.

June 21, 2024
Sell a Third of Existing Position: Sell a Third of your WMT January 65 Calls for $6.80 or more.

WMT is breaking out to a new high today and we are going to take advantage of this stock strength to lock in a profit of approximately 60% on the second third of our position.

To execute this trade you need to:

Sell to Close a Third of your WMT January 65 Calls

While I think WMT stock looks great, and I anticipate it will continue to move higher, we are going to stick to the system and sell another piece today, and will hold the balance looking for much greater gains in the weeks/months to come.

June 4, 2024
Sell a Third of Existing Position: Sell a Third of WMT January 65 Calls for $5.10 or more

Despite some wobbles under the surface of the market WMT stock continues to grind higher. And while I really like the way WMT is trading, today we are going to stick to the system, lock in a profit of 20% on the first third of our position and then go for greater gains in the weeks/months to come.

To execute this trade you need to:

Sell to Close a Third of your WMT January 65 Calls

May 17, 2024
Two Trades: Sell your RSP June 158 Calls for $10.20 or more, and Buy the Walmart (WMT) January 65 Calls (exp. 1/17/2025) for $4.80 or less.

Today we are going to make two moves …

First, we are going to sell our RSP calls for a profit of approximately 33%, as time is becoming an issue with this trade, and I want to move the capital into a fresher idea.

To execute this trade you need to:

Sell to Close your RSP June 158 Calls.

Next …

As I noted yesterday, Walmart (WMT) surged higher on earnings yesterday, and following that report the company/stock is getting glowing reviews from Wall Street (more on that below). In addition, since that earnings move option order flow has been very bullish, and finally the price of WMT calls are extremely inexpensive. Let’s get involved with a January call position.

To execute this trade you need to:

Buy to Open the WMT January 65 Calls.

The most you can lose on this trade is the premium paid, or $480 per call purchased.

The risks I see in this trade are largely market and sector related. Also, it’s possible that WMT may need to “chill out” after its big move higher yesterday.

That being said, I like this set-up a lot, and to pay $4.80 for eight months of exposure to an earnings winner is a great risk/reward.

Finally, here are a couple of the analyst upgrades following earnings:

Morgan Stanley raised the firm’s price target on Walmart to 70 from 67 and keeps an Overweight rating on the shares. Top-line growth and market share gains validate Walmart’s investments in store and online, in grocery and across general merchandise, and with both lower and upper income shoppers.

BMO Capital raised the firm’s price target on Walmart to 75 from 65 and keeps an Outperform rating on the shares. The company’s Q1 results saw a “strong beat” and gross margin expansion above expectations across all three of its business segments. Walmart commentary and disclosures – including improving Ecommerce losses, strong gross margins and price positioning – provided further evidence that momentum may continue, Investors should give the retailer credit for creating a “significant moat” thanks to its omni-channel investments and high-margin initiatives.