As I mentioned in a recent update, I expected my Walmart (WMT) naked put to be assigned since it was deep in the money and its ex-dividend date was coming up before March options expiration. Sure enough, I woke up to a notification that I was the new proud (?) owner of 100 shares of WMT stock. My WMT March $105 naked put brought in $419.32 when I sold it, so my cost per share after deducting this premium is $100.81, well above the closing price today of $87.51.

WMT has been closing at or just above its 200-day moving average for the past 10 days, but after making a push higher in early trading today, it closed below its 200-day moving average of $87.68. I’ve been waiting to see if the 200-day would be a solid floor for the stock and was willing to take the option assignment in the hopes it would rebound. After falling as low as $85.92 this afternoon, I’m starting to think I could do better with a different investment.

I didn’t make a move today since I wanted to see if it would push back above the 200-day by close and thought that since tomorrow is options expiration for March, it could get more volatile and move in my favor. Since it still seems to be stuck in the mud, I’ll probably take my losses tomorrow or early next week. It’ll be an ugly loss on a percentage basis, but the question to ask is not if I can get back to a profit, but if WMT is the best investment for me now. I’m leaning hard to the no camp on that question. I consider it a rookie mistake when investors try to hold on to their investment just to get back to even or better. That’s rarely the smart move. Cutting losses if the outlook has changed is a sign of investor maturity. I’ll try to be mature soon and do what’s best for my account, even though it’ll hurt my ego.



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