Walmart has been passing one of my covered call screens lately so today I purchased WMT shares at a price of $131.98 and shortly thereafter sold Apr-16 $135.00 calls at $2.42. There is an upcoming dividend of $0.55 per share with an ex-dividend date of March 18. Should my shares be called away at the call expiry date of April 16, this trade will generate an annualized return of 45.0%. If the price of WMT shares on April 16 is the same as my purchase cost then this trade will generate an annualized return of 22.0%.
Walmart’s stock price isn’t far from its 52-week low so today’s purchase may prove to be well-timed.