Walmart Inc WMT is set to print its second-quarter 2022 earnings before the markets open on Tuesday. On Monday morning, R5 Capital upgraded the stock to Buy and announced a price target of $169.
On Friday Pete Najarian said he believes Target Corp TGT is stealing market share away from Walmart and Amazon.com Inc AMZN as a result of Target’s partnerships and its investments back into its business.
Walmart is up over 12% from its June 18 low of $134.40 and on Friday was trying to break up from a bull flag pattern on the daily chart to surpass the Aug. 11 high of $151.58.
The retailer has certainly run up into its earnings event, which makes buying stock or bullish options risky. While a stock’s reaction to an earnings beat can be bearish and a miss can bring on a bearish reaction, it's more likely the stock will sell off if it’s run up into the event.
Walmart options traders weren’t fazed by the risk, however, and on Monday morning were hammering bullish call contracts. Together the traders purchased over $747,947 worth with one trader betting $115,500 on a single order of calls with a strike of $149 that expires on Sept. 10.
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Why It’s Important: When a sweep order occurs, it indicates the trader wanted to get into a position quickly and is anticipating an imminent large move in stock price. A sweeper pays market price for the call or put option instead of placing a bid, which sweeps the order book of multiple exchanges to fill the order immediately.
These types of option orders are usually made by institutions, and retail investors can find watching for sweepers useful because it indicates “smart money” has entered into a position.
The WMT Trades: Below is a look at the notable options alerts, courtesy of Benzinga Pro:
- At 9:32 a.m., a trader executed a call sweep at the ask of 210 Walmart options with a strike price of $155 expiring on Oct. 15. The trade represented a $57,750 bullish bet for which the trader paid $2.75 per option contract.
- At 9:32 a.m., a trader executed a call sweep near the ask of 380 Walmart options with a strike price of $155 expiring on Sept. 17. The trade represented a $70,300 bullish bet for which the trader paid $1.85 per option contract.
- At 9:43 a.m., a trader executed a call sweep near the ask of 300 Walmart options with a strike price of $149 expiring on Sept. 10. The trade represented a $115,500 bullish bet for which the trader paid $3.85 per option contract.
- At 9:45 a.m., a trader executed a call sweep near the ask of 200 Walmart options with a strike price of $149 expiring on Sept. 10. The trade represented a $77,000 bullish bet for which the trader paid $3.85 per option contract.
- At 9:46 a.m., a trader executed a call sweep near the ask of 200 Walmart options with a strike price of $149 expiring on Sept. 10. The trade represented a $78,000 bullish bet for which the trader paid $3.90 per option contract.
- At 10:05 a.m., a trader executed a call sweep near the ask of 211 Walmart options with a strike price of $152.50 expiring on Aug. 20. The trade represented a $37,558 bullish bet for which the trader paid $1.78 per option contract.
- At 10:12 a.m., a trader executed a call sweep near the ask of 213 Walmart options with a strike price of $145 expiring on Aug. 20. The trade represented a $136,320 bullish bet for which the trader paid $6.40 per option contract.
- At 10:20 a.m., a trader executed a call sweep near the ask of 500 Walmart options with a strike price of $160 expiring on Sept. 17. The trade represented a $47,000 bullish bet for which the trader paid 94 cents per option contract.
- At 10:28 a.m., a trader executed a call sweep near the ask of 500 Walmart options with a strike price of $155 expiring on Sept. 17. The trade represented a $102,500 bullish bet for which the trader paid $2.05 per option contract.
- At 10:37 a.m., a trader executed a call sweep near the ask of 441 Walmart options with a strike price of $190 expiring on Jan. 21, 2022. The trade represented a $26,019 bullish bet for which the trader paid 59 cents per option contract.
WMT Price Action: Shares of Walmart were trading up 0.8% to $150.77 at publicaiton time.
Photo: Mike Mozart on Flickr
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