Options Traders Swarm Walmart Stock After Earnings Beat

Morgan Stanley saw today's results coming

Digital Content Manager
Aug 16, 2022 at 10:49 AM
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Morgan Stanley was right when it noted a recent profit warning from Walmart Inc (NYSE:WMT) wouldn't last. In fact, the retail giant today reported a second-quarter top- and bottom-line beat. What's more, the blue chip added adjusted earnings will likely see a softer fall than previously anticipated, and said it now expects a smaller drop in annual profits, as the company discounts products to reduce excess inventory. Plus, Walmart just announced it entered a deal with Paramount Global (PARA) to offer its streaming service to the subscribers of Walmart+. At last check, WMT is up 5.5% to trade at $139.84.

Options traders are rushing the equity in response. So far today, 103,000 calls and 53,000 puts have already crossed the tape, which is nine times what is typically seen at this point. Most popular is the August 140 call, with positions being bought to open there, followed by the 127 put in the same month series. 

The shares are today trading at their highest level since May, when the security suffered a steep bear gap. In addition, Walmart stock has burst through the 200-day moving average, bringing its quarter-to-date gains to 15%. Longer term, though, the equity still carries a 7.3% year-over-year deficit.





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