Hey traders!
I hope this newsletter finds you navigating the markets with confidence and precision. As we navigate another earnings season packed with opportunities, I’m thrilled to share my latest insights straight from my home office in the San Juan Islands—and this time, from CNBC!
Spotlight: My Appearance on CNBC Power Lunch – How to Short Walmart Stock
On Tuesday, I had the pleasure of joining CNBC’s Power Lunch to break down Walmart’s ($WMT) current setup ahead of its earnings report. With the stock hitting record highs and surpassing a $1 trillion market cap, it’s looking seriously extended. History shows that when stocks are this stretched going into earnings, they often struggle to push higher post-report, making it a prime setup for a bearish play.
In the segment, I outlined why I’m betting on the downside using bearish call credit spreads. This strategy lets us capitalize on potential pullbacks while taking advantage of the implied volatility (IV) crush that can hammer outright put buyers after earnings.
Key highlights from the discussion:
- Stock Extension: Walmart has been on a tear, but it’s now statistically overextended compared to its recent 50-day performance. An expected move of just 6-7 points limits upside potential.
- Options Activity: Heavy volume and open interest at the $120 strike signal strong resistance—perfect for targeting downside.
- Trade Setup: I suggested selling at-the-money call credit spreads (about $4 wide) the day before earnings. For example, the 128 call credit spread for this week’s expiration. As an alternative, a bearish butterfly spread centered on $120 could work well too.
- Why Credit Spreads?: They provide a defined-risk way to short the stock, profiting from time decay and IV contraction without the pitfalls of buying premium over earnings.
Watch the full segment here to see the charts and my live analysis:
Today, I joined @TheDomino to discuss the short options position I placed in $WMT ahead of earnings.
While I’m a Walmart shareholder, when stocks are too extended going into earnings, I hedge using options to trade potential earnings pullbacks.@simplertrading #options… pic.twitter.com/RIkFLdPxca
— Danielle Shay (@traderDanielle) February 17, 2026
This trade is one I executed live in the Simpler Trading Mastering the Trade room. If you’re ready to trade alongside me and sharpen your edge with real-time strategies, join us today!
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Post-Earnings Update: How Walmart (WMT) Is Trading Today
Walmart reported its Q4 FY2026 earnings this morning, delivering a mixed bag that validated our bearish thesis. The company posted adjusted EPS of $0.74, edging out estimates of $0.73, while revenue came in at $190.66 billion—slightly above some expectations of $190.4 billion but missing others around $192 billion. U.S. comparable sales rose 4.6% (beating 4.4% forecasts), and e-commerce surged 24% year-over-year.
However, conservative guidance for FY2027—projecting EPS of $2.75–$2.85 (below consensus ~$2.94–$2.97) and sales growth of 3.5%–4.5%—spooked investors, highlighting potential slowdowns amid economic headwinds. The stock gapped lower at the open, hitting intraday lows near $122 before recovering slightly. As of midday (around 12:15 PM PST), WMT is trading at approximately $126.14, down about 0.38% from yesterday’s close, with volume elevated at over 19 million shares.
The chart shows a clear pullback from pre-earnings highs near $134.75, with the SqueezePRO indicator firing to the downside, signaling continued downside momentum and IV contraction—perfect for our credit spread plays. Additionally, I placed bearish butterflies in the Mastering the Trade room.
This reaction underscores the value of defined-risk strategies in volatile earnings environments; if you followed along, congrats on trading the move!
Join me in the Mastering the Trade Room at Simpler Trading!
What’s Next?
I’ll be back with more breakdowns, including post-earnings recaps and fresh trade ideas.
Next week, I’ll be heading to Las Vegas to speak at the Money Show! If you’ll be there, come say hi!
In the meantime, connect with me on social for daily tips:
- Follow me on X: @traderDanielle
- Instagram: @traderdanielleshay618
- Visit my site: www.danielleshay.com or www.fivestartrader.com for more resources.
What’s your take on Walmart’s earnings? Drop a comment on the video—I’d love to hear your strategies!
Trade smart,
VP of Options, Simpler Trading
