Walmart Again

On Monday I did a blog on buying this week's Call options on Walmart for a morning move. Today is now Thursday and there was a big sell off in the markets yesterday. Tesla sold off for example and here is what happened to it. Today it is slightly rebounding as are so many other stocks. Thursdays however as oftened mentioned in recent blogs are not a good time to be purchasing one day options on stocks that expire the next day. Times change. In less chaotic times that's not always case. In the last few years there would be known upcoming Friday morning events like the release farm payroll numbers or other economic readings that would move the needle on the markets going up or down on on a Friday morning. In those markets it paid to get into option positions before the closing on a Thursday to get out on the Friday morning bounces were caused by the release of these premarket reports.

So how is any of this revelant to Walmart's trading today? Well, there was a whole bunch other stocks that got knocked down yesterday that are rebounding back up again. Look at the chart below of Walmart and see how it was off a couple of dollars yesterday. Could you buy in now and get out later in the day? Fantasy thinking, one might say. Even a one dollar at this point in time could create a profitable trade. Now this, a look at how the stock in mid morning trading is merely going sideways.

Now look at the 93 series of Calls. (On Monday we were looking at the 94 series of Calls).

At 10:22 a.m. the stock is up six cents. It was a lot higher on the previous day. If the markets show any signs afternoon strenght will this one rally? Now let's jump ahead. Here is how the markets closed.

Here now is how Walmart closed out the day. It was down fifteen cents with most of that action happening in the last thirty minutes of trading.

Why did it sell off at the end of the day? One reason is that Costco crashed all week. Here is it's five day chart.

What does all of this tell us? It tells us to stay away from owning option positions going into tomorrows opening. If you want to play options on this stock tomorrow with fresh eyes that's a completely different story. Now for the suprise Friday ending. Here is how the markets are trading at 3:00 p.m., the time these options expire. Yes, the DJIA was up over 620 points!

Now the one day trading chart on Walmart up to 3:00 p.m.. This is the time these options expire for "retail" traders.

Now a look at how the 93 series of Calls expired.

To recap what just happened. The $92.00 series of Calls closed on Thursday at $.85 and then opened Friday morning at only $.43 . Then at 9:47 a.m. the stock dipped to $91.09 at which time the $93.00 Call options sold off to $.06. a contract or $6.00. Then at 11:43 a.m. the stock rebounded to $93.74 and the same $93 series of Calls rebounded back up again to $.77 or seventy-seven dollars. Finally at 3:00 p.m. (which is the deadline for retail traders to be out any positions they are holding) this series trading back down at $.10 or ten dollars a contract. Was any of this ride playable? Maybe a case could be made for purchasing the 92 series or 93 series of Calls fifteen minutes into the trading action and catching the late morning rally. A final note. During the merriment of all these happenings there will always be analyst chiming in with random observations. On Friday mornings not much of what they are saying will matter.

The action in Walmart and Costco options can be fast and furious.