Question

I would like to do a bull put spread using Walmart, as their stock price has...

I would like to do a bull put spread using Walmart, as their stock price has been going up (due to their deal in buying TikTok). I would like to do a bull put in the short-term.

I would like the expiry to be on 9/25/2020. What should I set the strike price and quantity to?

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Answer #1

Bull put strategy is done when the investor will be expecting that he wants to gain on the moderate rise of the price of the share.

Hence, investor will be selling a put option of higher strike price and buying a put option of lower strike price.

In case of Walmart,I will try to sell the put option of 145 and buy the put option of 130 so, the premium will received upon the put option selling will be $8 and premium which will be paid on the put option buying will be $5,so my net gain is to earn $3 on expiry as the share prices are expected to remain between 145 to 150.

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