Why be scared to play when a proven winner is cheap?
By Paul Price of Market Shadows
Much despised, but highly profitable, Wal-Mart (WMT) had retreated from $81.37 to $72.54 even as its fundamentals continued to set new records.
Market Shadows Virtual Put Writing Portfolio sold two contracts of the WMT Jan. 2016, $70 puts @ $7.00 per share this afternoon.
Our maximum profit is $1,400 or 100% of the money we received for commiting to buy 200 shares of WMT at a net cost of $63 ($70 strike price – $7 put premium).
Wal-Mart has not traded as low as our break-even price since it gapped higher in May of 2012.
At the ‘if put’ price of $63 Wal-Mart’s present day, 47-cent quarterly dividend, would provide a 2.98% current yield.
This new short put position is now reflected as an open trade in our
