WMT call options might be on price roll back

WMT call options getting interesting

WMT is starting to become the AMZN of retailing.  This is a little funny but WMT is opening health clinics in their stores, jumping into ecommerce and delivery and has a global foot print.  Also the stock is getting a multiple.  Somewhere, somehow WMT became a stealthy momo stock.

WMT Call IV is cheap but not too cheap

WMT short term IV is very cheap, 120 day reasonably cheap

I think WMT keeps going higher and I like it as a long term hold.  For a giant company it is using stores as test beds for various things and that kind of thinking will create some value down the road.  But really I am looking at risk reward for midterm option plays. If you one wants to own WMT stock at the tip top, how do you do it? Calls in the Dec cycle are around 18% which is reasonable but not crazy cheap.

I want something that will pay on an easy $3 to $4 move

WMT Dec $125 calls are around 1.60 so on a move to 120 or more for WMT they will get hopping.  The WMT Dec20 105 puts are 1.15.  This seems like a cheap strangle for a stock that was just 105.  3 calls to 2 puts would work fine and ride the momentum with a decent long delta.

Disclosure: positions in WMT

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