Turning Everyday Products into Wheel Barrels of Cash

Wal-Mart is an American Dream starting in 1960s with one small store in Arkansas and expanding to more than 5,000 stores all over the United States.

By the 1990s the company began earning more profits than previous retail king Sears.

Retail has been a depressing investment lately with everyday news of Amazon taking over the world. However, Wal-Mart is fighting back and has recently reported that its online sales grew 67% by volume.

This strong growth has helped propel the company’s share price higher this year while other retail giants, such as Macy’s, are on a water slide.

Since 1973 Wal-Mart has been a winning investment returning 17.2% to buy and hold investors. The downside of buy and hold is you have to hang on during wild times.

In the shorter term, this chart is showing a nice uptrend with MACD momentum support.

If you've been thinking about buying this blue-chip stock, now could be the perfect time.

Today we can take advantage of an excellent company that still dominates retail and is showing ability to fight Amazon with selling a Put Option. By selling a Put Option we give the buyer the right but not the obligation to sell shares of WMT to us during the option time period. For this trade off we get paid upfront and hope WMT trades slightly higher by expiration day so that the option will expire worthless.

In the event that WMT share price stays below the strike price of the option we sold then we would purchase 100 shares of WMT for every 1 put sold at a great price for a long term holding. After which we could turn around at sell covered calls against the shares that we own to generate more income.

Please use a 10% protected stop on WMT share price. Meaning if WMT share price falls to around $71.58 then you should buy back the put option sold to close the position.

Action:
Sell November 17, $80 puts on WMT for at least $2.61 each (use a limit order). This produces a 3.3% payout on your purchase obligation to buy shares at $80 per share for an annualized return of 16.3%. You will need $8000 dollars to secure each put option sold.

(Download the Option Return Calculator right here).

Thank you for your reading.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article.