Is WalMart the store we go to now?

Target has been in the news lately – and it hasn’t been good. There is anecdotal evidence that shoppers are reluctant to shop at Target. The situation is unfortunate because Target is a great store and my favorite place to shop. It will take some time for them to repair their image, but it will be repaired in time.

In the meantime, what is the first store you think of if you aren’t going to Target? WalMart, of course.  As a trader I think it is very important to avoid predicting the future. No one can do it, especially not me! But, sometimes, you just can’t avoid it. I think it’s highly likely that business will improve at Walmart as a reaction to Target’s troubles, at least temporarily. So, we feel comfortable holding onto and maybe even increasing our position in Walmart.

On the 9th, we sold three more 78 puts at 30, 33, and 36 cents. Then, on Friday the 10th, we rolled the position. This involved buying the expiring puts for 15 cents and selling the next week’s 77.5 puts for 39 cents. The result was a 24 cent credit for the trade.

Today, we sold another 77.5 put for 60 cents. The total position now is short 11 Jan 77.5 puts, expiring Friday. The profit, if the position was closed now, is $85. It was much better before the large drop in the market pulled down Walmart today. We are enjoying a daily time decay (Theta) of about $56 a day. Subscribers get the details at for only $20 a month! Join us!

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