Option Traders Brace for Wal-Mart Stores, Inc. (WMT) Earnings

Wal-Mart Stores, Inc. (NYSE:WMT) will unveil its fourth-quarter results ahead of tomorrow's open

Feb 17, 2016 at 2:37 PM
facebook X logo linkedin


Just weeks after announcing it will shutter 269 stores, retail behemoth Wal-Mart Stores, Inc. (NYSE:WMT) -- along with this notable casino concern -- will unveil its fourth-quarter earnings report ahead of tomorrow's open. Ahead of the event, the stock is getting a lift from the broader equities market, up 0.6% at $66.29, and option traders are split right down the middle.

By the numbers, about 15,000 calls have changed hands today, compared to roughly 14,000 puts. This is about on par with WMT's average intraday pace. Most active so far is the stock's February 67 call, where it appears new positions are being purchased. If traders are indeed initiating new long positions here, the goal is for WMT to rally north of $67 by week's end, when front-month options expire.

More broadly speaking, pre-earnings speculators at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have been lining up on the bearish side of the fence at a rapid-fire rate. Specifically, WMT's 10-day put/call volume ratio of 1.49 sits above all other readings taken in the past 52 weeks.

Given WMT's recent run up the charts, some of this put buying could be a result of shareholders protecting paper profits. Year-to-date, WMT has now tacked on over 8% -- and is one of the best performing Dow components in 2016, second only to Verizon Communications Inc. (NYSE:VZ) -- but is stalling out near its 200-day moving average. This trendline is currently located at $66.62, and has contained WMT's advances so far this month.

Regardless, those purchasing Wal-Mart Stores, Inc.'s near-term options are encountering lofty volatility expectations. As is often the case ahead of scheduled events, WMT's 30-day at-the-money implied volatility is inflated, last seen at 26.8% -- in the 95th percentile of its annual range.

Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical  levels, and top economic stories straight to your inbox.

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI