8/23/2020 Plan: We look to sell a put spread in Walmart (Ticker: WMT)
8/23/2020 Plan (continued):
- WMT – Sell 2 of the 4 September 126/123 put spreads for 0.35. We may look to go another week and use the 125/122 strikes if we can’t get filled on the 4 September trade.
- This is $265 in risk per spread. Scale accordingly.
- Prices are as of market close 8/21/2020, actual fill and strikes may differ depending on Monday open, post will be updated accordingly.
- All trades are for educational purposes and do not constitute advice
8/23/2020 Commentary:
With earnings announced last week, there isn’t much in the next two weeks that should cause drastic moves in WMT (standard disclaimer about world wide pandemic not withstanding…). Note that the Implied volatility remains well above the historical volatility, so we look to sell options with the expectation WMT’s movement will continue to underperform the option’s implied move. If the options expire worthless, we’ll return over 13% in a couple weeks (35/265 = 13.2%), a nice return.
Reach out with any questions on this or any other trade!
8/24/2020 Entry:
Sold 11 September 125/123 put spreads for 0.22. A bit less than we would like but note that the risk is significantly less (2 strikes wide vs. 3).
8/30/2020 Update:
WMT shot up this week on news that it is partnering with MSFT on a bid for TikTok and our put spreads decayed quite a bit and are now only worth about 0.08. We’ll leave the spreads on in an attempt to collect more premium and may look to close for a few cents later in the week
9/3/2020 Close:
Closed the put spreads for 0.01 to take risk off with another week to go. Another win for our members! $21 per put spread of gain, $42 for the trade ($63 for those that did 3, etc.). This is a roughly 12% return on risk in about a week and a half.
