Safe way to pocket premium

September 01, 2020 - 12:14 pm

Shares of Walmart trade at $143 today, and it remains in an intact uptrend. At this price or even at a slight discount we don't want to be owners of the stock. It's had a steady run and there are better places to park our money that have stronger growth prospects.

A relarively risk-free trade we are putting on is to sell the October 2020 $125 Puts for $1.10.  That's a healthy premium we expect to pocket if the stock stays above $123.90, if it looks like it may drop below we'll buy these Puts back for a loss.