Schaeffer's Trading Floor Blog

Wal-Mart Stores, Inc. (WMT) Edges Higher After Earnings

Meanwhile, traders have been bearishly biased toward WMT

by 11/14/2013 12:57 PM
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News Brief: Wal-Mart Stores, Inc. (NYSE:WMT) revealed mixed results in the earnings confessional this morning, with the retailer reporting a third-quarter profit of $1.14 per share on revenue of $115.7 billion. Analysts, on average, were expecting earnings of $1.13 per share on sales of $116.8 billion. Meanwhile, WMT narrowed its full-year outlook to a range of $5.11 to $5.21 per share, versus its previous estimate of $5.10 to $5.30 per share.

Wall Street seems to be shrugging off this reduced forecast, as the stock is currently up 0.5% to trade at $79.26. However, WMT's sentiment backdrop has been bearishly skewed lately. The security's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio sits at 1.02, indicating puts bought to open have slightly outpaced calls during the last two weeks. This ratio ranks higher than 69% of similar readings taken within the past year, meaning traders have been scooping up puts over calls at an accelerated clip.

Similarly, Schaeffer's put/call open interest ratio (SOIR) for Wal-Mart Stores, Inc. (NYSE:WMT) checks in at 1.14, confirming puts outnumber calls among options scheduled to expire in the next three months. This ratio is docked in the 84th percentile of its annual range, conveying near-term speculators are more put-heavy toward the security than usual right now.

This favoritism towards puts over calls seems to be continuing in today's options pits, as well. At last check, roughly 25,000 puts had crossed the tape so far, compared to just 13,000 calls.

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