WMT, the little-known discount retailer (kidding) reports earnings on May 15th before the open.? Surprisingly does not trade as actively as many traders might expect.? ?Ahead of earnings, in the May standard contract a customer bought, through the system (electronically) over 10,000 of the May 80 calls paying about .23 a contract.

This is an IV of about 13.40, this trade is either one of two things, both related to earnings.? Either a person is selling the stock and using these calls to hedge upside (as a stock replacement or an outright short).? Or it is a trader making a bet on how WMT is going to perform into earnings.? The trader would need WMT to rally about 3.00 to see a profit on these calls.

This trade should be viewed as aggressively bullish volatility and potentially neutral the underlying.? Traders looking to piggy back can buy the 77.5/75 strangle for less than 1.60 can achieve a small bullish delta bias.