Walmart fought back today

Walmart (WMT) disappointed the Street yesterday and the earning report did not meet their expectation. Needless to say, all the Street was dumping WMT immediately. It crashed by 3%, down to as low as $83.5 yesterday.  As I said, I was gambling on WMT and betting for a good earning report. I of course was disappointed. The put option I placed expired today. Since my strike price was $85, I will have to buy WMT at $85.

Today before the opening, the Barclay analyst issued her report downgrading WMT, putting salt on the wounds. As the majority of "investors" are nothing buy part of herd, they simply followed the lead from the herd head (the Barclay analyst) and were very busy further selling WMT pre-market. At the opening, WMT came down to as low as $82.75, another 1% decline. But enough is enough. Shortly after the opening, WMT started to fight back, defiant against the herd. It never looked back and went up all the way to $84.30 at closing. Since I collected $0.81 for the put option, my actual purchase price will be $84.19 per share ($85-0.81). As such I'm actually making money even though I was wrong and WMT was declining. Even more beautifully, I can start to sell covered calls to get more incomes. E.g. WMT Feb 27 $84.5 call options are priced at $0.6. I can collect 60 cents per share in one week, plus the 30 cents in the money, I potentially can make another $0.9 per share in one week time. That's the beauty to use quality cheap value stocks to make short term income trade. WMT is fundamentally cheap the this price and you can also make such covered calls for income.