Is WMT Still a Buy?

Wal-Mart Stores WMT – NYSE

Tuesday, August 08, 2017

In June, Wal-Mart Stores WMT – NYSE fell 5% on the news of Amazon.com AMZN – NASDAQ acquiring Whole Foods Market WFM – NASDAQ. This dip proved to be a lucrative buying opportunity for WMT, as the stock responded by bouncing 11.3% over the last month.

With WMT now at fresh 52-week highs, a sharp trader bought 3,000 WMT September 80 calls for $2.39 each earlier today.

WMT

Costing $717,000, WMT needs to increase just 1.0% to the break-even price of $82.39 for this trade to pay off. Since these options are already well in-the-money, only a miniscule move is necessary.

Above break-even, our customer stands to make $300,000 for every dollar WMT rises. On the flip side, should WMT close below the strike price of $80 (-2.0%) at expiration, all will be lost.

Top 5 Imminent Mergers & Acquisitions: By tracking highly unusual options trades, we tip members to upcoming buyouts, M&A activity, and secret boardroom deals before the news is public. Some members have described it as “having a wiretap on every single company.” Click here for the top 5 stocks about to make some major headlines.


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