Wal-Mart (WMT) plans to enter the consumer-banking world with around 1,000 Wal-Mart MoneyCenters in stores across the US by the end of 2008. The chain will also sell prepaid Visa debit cards. This will provide lower-income shoppers, who may not have access to conventional banking, a way to participate in cashless transactions.
Audio Podcast:
An audio podcast of this article is available at: poweropt.com/podcasts/2007_06_20_WMT.mp3
| Signup now for PowerOptions free 14-day trial |
In March, Wal-Mart was forced to withdraw a bank license application because of opposition led by banks and unions. The group’s argument to federal regulators focused on the idea of a Wal-Mart bank concentrating too much economic power.
| Signup now for PowerOptionsApplied 30-day risk free trial |
Walmart has now backpedaled and its MoneyCenters and MoneyCard will not require a banking charter. These institutions will operate under a partnership agreement with GE Money Bank and the GreenDot network, a financial services company based in LA.
Experts estimate up to 40 million American households do not have bank accounts and consequently pay excessive fees for financial services. Jane Thompson, president of Wal-Mart Financial Services, estimates the average Walmart family will save about $450 a year in fees they would traditionally pay to other check cashing services.
The MoneyCard, which is branded with the Visa logo, can be loaded in Wal-Mart stores by depositing cash, or by depositing a paycheck or government check. It can also be reloaded at any GreenDot network location. The card can be used as a traditional debit card, to pay for gas at the pump or to pay bills online, or to receive cash without paying a fee at the checkout counter. The cost is a one-time $8.95, but there will be no additional fees, such as overdraft fees, since the credit line is the amount of the customer’s deposit. There is no credit check required to get the card.
Looking at this News from an Options Trading Perspective:
It is always difficult to say how news like this will affect the stock price of a behemoth like Wal-Mart. As an exercise showing the nimble capabilities of the PowerOptions search platform, it would be fun and enlightening to look at how options in the Discount Retail Sector are doing. And because option data is often cumbersome and difficult to find, an investor really requires the aid of a solid tool to help them sort through the noise. With its 14-day free trial, there’s really no reason not to take PowerOptions for a test drive. We think you’ll find the interface easy to use and you’ll be finding desirable option trading ideas in no time. PowerOptions has trading experts available to help investors more fully understand the option trading process. They can be reached, toll free, at 877-992-7971. There are additional resources on the PowerOptions website for investors to learn more about the fun and exciting world of option investing. The following links, Help with Options, How to Write Covered Calls and Investing in Options are all great resource articles to help you get the hang of options trading.
Potential Trades:
Below the Poweroptions blog takes a look at a few companies in the discount retail sector. This broad view may help an investor identify other compelling trades in the sector. All of the following option trades have 59 days until expiration. These trades were discovered using the powerful suite of option search tools found at PowerOptions.
| PowerOptions covered call search Discount Retailer (59 days) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock Sym |
Stock Price |
OPTION | Strike Info |
Opt Bid |
% Dnsd. Prot. |
% If Unch. |
% If Asgnd |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| WMT | $48.81 | WMTHW | 07 AUG $47.50 | $2.30 | 4.70% | 2.20% | 2.20% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| TGT | $64.39 | TGTHM | 07 AUG $65.00 | $2.60 | 4.00% | 4.20% | 5.20% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| BIG | $29.31 | BIGHF | 07 AUG $30.00 | $1.65 | 5.60% | 6.00% | 8.50% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NDN | $12.46 | NDNHV | 07 AUG $12.50 | $0.75 | 6.00% | 6.40% | 8.50% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
WMT:
The Wal-Mart involves the August $95 call option and offers 2.8% downside protection and 2.1% potential profit if the stock is above the $95.00 strike price at the end of the option period. The stock is currently trading at $95.67.
TGT:
The Target trade involves the August $22.50 call option and offers 3.4% downside protection and 12.3% potential profit if the stock is above the $22.50 strike price at the end of the option period. The stock is currently trading at $20.74.
BIG:
The Big Lots trade involves the August $45.00 call option and offers 3.9% downside protection and 7.9% potential profit if the stock is above the $45.00 strike price at the end of the option period. The stock is currently trading at $43.40.
NDN:
The 99-cents only Store trade involves the August $30.00 call option and offers 4.9% downside protection and 10.5% potential profit if the stock is above the $30.00 strike price at the end of the option period. The stock is currently trading at $28.55.
Competitors:
Competitors for WMT include: Costco Wholesale Corp. (COST), Target Corp. (TGT), Carrefour SA (private), Autozone Inc. (AZO), Bed Bath & Beyond Inc. (BBBY), Best Buy Co. Inc. (BBY), Big Lots Inc. (BIG), Brown Shoe Co. Inc. (BWS), CSK Auto Corp. (CAO), Circuit City Stores Inc. (CC), Casual Male Retail Group Inc. (CMRG), Conns Inc. (CONN), CVS Corp. (CVS), Dicks Sporting Goods Inc. (DKS), drugstore.com Inc. (DSCM), Family Dollar Stores Inc. (FDO), Foot Locker Inc. (FL), Freds Inc. (FRED), Hibbett Sporting Goods Inc. (HIBB), Penney (J.C.) Co. Inc. (JCP), Kroger Co. (KR), Longs Drug Stores Corp. (LDG), Nash Finch Co. (NAFC), 99 Cents Only Stores (NDN), PetsMart Inc. (PETM), Payless ShoeSource Inc. (PSS), Rite Aid Corp. (RAD), Renters Choice Inc. (RCII), Sally Beauty Holdings Inc. (SBH), Sears Holdings Corp. (SHLD), Stage Stores Inc. (SSI), Safeway Inc. (SWY), Walgreen Co. (WAG), and Zale Corp. (ZLC).
Competitors for TGT include: Costco Wholesale Corp. (COST), Wal-Mart Stores Inc. (WMT), Kmart Corporation (private), Bed Bath & Beyond Inc. (BBBY), Big Lots Inc. (BIG), Charming Shoppes Inc. (CHRS), Gymboree Corp. (GYMB), Penney (J.C.) Co. Inc. (JCP), Kohls Corp. (KSS), PetsMart Inc. (PETM), Sears Holdings Corp. (SHLD), Stage Stores Inc. (SSI), and Tuesday Morning Corp. (TUES).
Competitors for BIG include: 99 Cents Only Stores (NDN), Target Corp. (TGT), and Wal-Mart Stores Inc. (WMT).
Competitors for NDN include: Big Lots Inc. (BIG), Dollar General Corp. (DG), Wal-Mart Stores Inc. (WMT), and Dollar Tree Stores Inc. (DLTR).
For more information about how to identify and research great option trades, visit the PowerOptions website. There you will find the data you need to make quick, clear, and informed decisions. You can trade knowing you have found the best investment. Also, PowerOptions will allow you, with a few quick clicks, to quickly and accurately compare trades. PowerOptions‘ premium customer support is second to none in the industry. They can be easily contacted when you need them at their toll-free number to answer customer questions. Call them now toll free at 877-992-7971.
PowerOptions provides a free 14-day trial of its service. So join PowerOptions today, and you too can start reaping the benefits of the covered call investment strategy.
PowerOptions‘ sister company PowerOptionsApplied provides expert stock option trading recommendations. PowerOptionsApplied specializes in covered calls, naked puts and iron condor stock options strategy recommendations. PowerOptionsApplied provides a 30-day risk free trial of its service.
[tags] Visa, MoneyCenters, MoneyCard, GE Money Bank, GreenDot, Carrefour SA, Kmart Corporation, AZO, Autozone Inc., BBBY, Bed Bath & Beyond Inc., BBY, Best Buy Co. Inc., BIG, Big Lots Inc., BWS, Brown Shoe Co. Inc., CAO, CSK Auto Corp., CC, Circuit City Stores Inc., CHRS, Charming Shoppes Inc., CMRG, Casual Male Retail Group Inc., CONN, Conns Inc., COST, Costco Companies Inc., CVS, CVS Corp., DG, Dollar General Corp., DKS, Dicks Sporting Goods Inc., DLTR, Dollar Tree Stores Inc., DSCM, drugstore.com Inc., FDO, Family Dollar Stores Inc., FL, Foot Locker Inc., FRED, Freds Inc., GYMB, Gymboree Corp., HIBB, Hibbett Sporting Goods Inc., JCP, Penney (J.C.) Co. Inc., KR, Kroger Co., KSS, Kohls Corp., LDG, Longs Drug Stores Corp., NAFC, Nash Finch Co., NDN, 99 Cents Only Stores, PETM, PetsMart Inc., PSS, Payless ShoeSource Inc., RAD, Rite Aid Corp., RCII, Renters Choice Inc., SBH, Sally Beauty Holdings Inc., SHLD, Sears Holdings Corp., SSI, Stage Stores Inc., SWY, Safeway Inc., TGT, Target Corp., TUES, Tuesday Morning Corp., WAG, Walgreen Co., WMT, Wal-Mart Stores Inc., ZLC, Zale Corp., covered call investment strategy, help with options, how to write covered calls, investing in options, investment strategy, iron condor, option investing, options trading, poweroptions, stock option trading, stock options [/tags]