Options Traders Laying Bets That Wal-Mart Can Rejoin Bull Market
By Jennifer Kaplan
Options investors are speculating Wal-Mart Stores Inc. is about to get some relief from consumers after its worst start to a year since 2009.
Demand for contracts to protect against losses in the stock fell last week to the lowest level in six years compared to bullish ones, data compiled by Bloomberg show. Wal-Mart shares have lost 9.1 percent in 2015 after announcing it would raise wages and a strong U.S. dollar cut into the value of overseas revenue.
The world?s largest retailer is still waiting for shoppers to bring it the money they saved on gasoline after U.S. data from March showed retail sales were less impressive than economists forecast.
Investors may be pleasantly surprised when the company reports results in two weeks, according to Max Breier, a senior equity derivatives trader at BMO Capital Markets Corp. ?You?ve got the added tailwind of still relatively low oil prices that I think are helping its target consumer base.?
Wal-Mart is in the midst of a turnaround plan under CEO Doug McMillon to cut expenses and bolster efficiency. It announced last week it?s eliminating its U.S. regional-division executive vice president positions as it seeks to simplify operations and improve customer service.