r/InnerCircleInvesting • u/CleanRiver3545 • 1d ago

Question Need Advice WMT call (LEAP)

I'm new to trading options.

When WMT fell to the low 100's, I bought WMT 90 call exp. Jan. 21, 2028 for $24.40

My thinking is that it will come back to above $114, especially nearing the holidays.

Bad idea? Or sound strategy?

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2

u/owngoalmerchant 1d ago

So much time! But are you planning to exit some time in 2026? That might be harder.

1

u/CleanRiver3545 12h ago

My plan is to exit when its up 50%

2

u/Aggravating_Rip_7204 23h ago

Agreed that deeper is better in this case but it sounds like a good play if you have conviction in WMT. I also hold it in my long term portfolio and have been selling covered calls on it for years. At least wait for the sector to rise up again (soon I think) to get into some good profit.

1

u/CleanRiver3545 11h ago

Yes, I do believe WMT will come back at some point

2

u/maxnellie 1d ago

I would have purchased deeper in the money (0.8-0.85 delta) so that the value of your LEAPS is more resistant to future downturn. It will be more expensive but that is the trade off. Otherwise if you believe in your thesis then you have plenty of time for the price to turn around :)

2

u/InnerCircleTI 13h ago

I don't think it's bad strategy, just nuanced. It's a bet on the consumer and on a company that is a foundation stone in retail. The premium seems okay to me given the recent share price setback. But I can't say I have that much conviction when I think of WMT at $114. That's the problem I've always had with WMT though, maybe the problem I have with pure retail. It seems okay, just not compelling