Your uncle owns 10,000 shares of Walmart stock. He is concerned about the short-term outlook for Walmarts stock due to an impending major announcement. This announcement has received much attention in the press so he expects the stock price will change significantly in the next month, but is unsure whether it will be a profit or a loss. He hopes the price will increase, but he also doesnt want to suffer if the price were to fall in the short term.

His broker recommended he buy a protective put on the stock, but your uncle has never traded options before and is not much of a risk taker. He wants you to devise a plan for him to capitalize if the announcement is positive but to still be protected if the news causes the price to drop.

1. For background, use any online resource to research the market capitalization, stock price, leverage, ticker, and trading volume of Walmart.

2. Download option quotes on options that expire in approximately one month on Walmart from the Chicago Board Options Exchange (cboe.com (Links to an external site.)) into an Excel spreadsheet (click the Quotes & Data tab at the top left portion of the screen and then select Delayed Quotes).

(Note: You can only get active quotes while the exchange is open; bid or ask prices are not available when it is closed. You can use other sources to find what put options are available and their prices)

3. Suggest and price the put portfolio to your uncle that protects his investment. Your choice can include a single out-of-the-money option, or it can include several puts with different strike prices that are exercised sequentially.

4. If puts are not available, would you suggest to construct a put using comparable call option and using the call-put parity?

5. (open-ended question) Your uncle complains that, although investment with put options is better protected, it is far less profitable now. He is asking you how to pay for the puts. What is your reply? Is there some way to construct a costless option portfolio that reduces the investment risk?

There is a picture attatched that shows all necessary information from the excel file. If it is hard to see just follow the steps in #2 and it will show you how to gain access to the file

AutoSave OFF sv 5 = walmart quote data Q- Search Sheet Share Comments Check for Updates N O P Q R S T U V Last Sale 0 0.08 0.13 0.17 50 Net 0 0 0 0 0 0 0 0 O 0.53 0.6 34 Home Insert Draw Page Layout Formulas Data Review View Office Update To keep up-to-date with security updates, fixes, and improvements, choose Check for Updates. | 0129 x fox A C D E F G H I J K L WMT (Walmart Inc) 123.35 -1.43 May 07 2020 @ 06:09 ET Bid 122.26 Ask 124.45 Size 1x1 Vol 5769725 Expiration Date Calls Last Sale Net Bid Ask Vol IV Delta Gamma Open Int Strike Puts 06/05/2020 WMT200605C00065000 0 0 56.05 60.8 0 1.78 0.9294 0.002 0 65 WMT200605P00065000 06/05/2020 WMT200605C00070000 0 0 51 55.750 1.5585 0.9267 0.0024 0 70 WMT200605P00070000 06/05/2020 WMT200605C00075000 0 0 46 50.75 0 1.3527 0.9246 0.0028 0 75 WMT200605P00075000 06/05/2020 WMT200605C00080000 0 0 41 45.75 0 1.1731 0.9214 0.0034 0 80 WMT200605P00080000 06/05/2020 WMT200605C00085000 0 0 36 40.750 1.0146 0.9168 0.0041 0 85 WMT200605P00085000 06/05/2020 WMT200605000090000 33.43 -1.57 31 35.75 8 0.873 0.9102 0.0051 0 90 WMT200605P00090000 06/05/2020 WMT200605C00095000 33.55 3.55 26 30.75 1 0.7313 0.9043 0.0063 0 95 WMT200605P00095000 06/05/2020 WMT200605000100000 24.96 0 21 25.75 0 0.6139 0.8915 0.0083 0 100 WMT200605P00100000 06/05/2020 WMT200605000105000 0 0 16.55 20.3' 00.4586 0.8923 0.0111 0 105 WMT200605P00105000 06/05/2020 WMT200605000110000 14.6 -0.475 13.45 14.8 20.3147 0.894 0.0159 5 110 WMT200605P00110000 06/05/2020 WMT200605000113000 12.8 0 10.3 12.95 1 0.3423 0.8141 0.0217 1 113 WMT200605P00113000 06/05/2020 WMT200605000114000 0 0 10.1' 11. 6 0 0.3762 0.7707 0.0225 0 114 WMT200605P00114000 06/05/2020 WMT200605C00115000 10.55 -0.2 8.5 10.4 1 0.3447 0.7595 0.0252 2 115 WMT200605P00115000 06/05/2020 WMT200605000116000 0 0 7.6 9. 6 0 0.3792 0.718 0.0249 0 116 WMT200605P00116000 06/05/2020 WMT200605000117000 0 0 7.55 8.95 0 0.3218 0.7144 0.0296 0 117 WMT200605P00117000 06/05/2020 WMT200605C00118000 8.3 -1.25 7.5 8.15 1 0.3721 0.6639 0.0275 3 118 WMT200605P00118000 06/05/2020 WMT200605000119000 7.13 0 6.5 7.3' 00.3499 0.6399 0.03 0 119 WMT200605P00119000 06/05/2020 WMT200605000120000 7 0 6.2 6.65 0 0.3402 0.6105 0.0317 12 120 WMT200605P00120000 06/05/2020 WMT200605000121000 6. 5 0 5.5 6.1 0 0.3448 0.5771 0.0319 48 121 WMT200605P00121000 06/05/2020 WMT200605000122000 5.3 -0.15 4.8 5.55 4 0.3504 0.5444 0.0318 77 122 WMT200605P00122000 06/05/2020 WMT200605000123000 4.96 -0.44 4.2' 4. 9 2 0.3464 0.5119 0.0324 118 123 WMT200605P00123000 06/05/2020 WMT200605000124000 4.55 -0.05 3.95 4.4 13 0.3507 0.4803 0.032 64 124 WMT200605P00124000 06/05/2020 WMT200605000125000 3.75 -0.475 3.6 3.95 87 0.3439 0.447 0.0324 385 125 WMT200605P00125000 06/05/2020 WMT200605000126000 4 0.435' 2.76 3.65 2 0.3691 0.4236 0.0299 12 126 WMT200605P00126000 06/05/2020 WMT200605000127000 2.88 -0.57' 2.6 3.35 98 0.3522 0.388 0.0306 76 127 WMT200605P00127000 06/05/2020 WMT200605000128000 2.5 -0.625 2.25 2.94' 10 0.3396 0.3524 0.0308 333 128 WMT200605P00128000 06/05/2020 WMT200605000129000 2.35 0.26' 1.57' 2.65 1 0.3149 0.308 0.0315 248 129 WMT200605P00129000 06/05/2020 WMT200605C00130000 1.99 -0.325 1.9 2.22 48 0.3423 0.2971 0.0285 195 130 WMT200605P00130000 06/05/2020 WMT200605000131000 1.8 0.14 1.7 2.1 219 0.3409 0.2698 0.0273 222 131 WMT200605P00131000 06/05/2020 WMT200605000132000 1.8 -0.145' 1.272.33 30.3532 0.2534 0.0256 22 132 WMT200605P00132000 06/05/2020 WMT200605C00133000 1.44 -0.405' 1.26' 4.5' 10 0.3424 0.2243 0.0247 31 133 WMT200605P00133000 06/05/2020 WMT200605C00134000 1.29 0 0.63 1.77 0 0.335 0.1946 0.0232 103 134 WMT200605P00134000 06/05/2020 WMT200605C00135000 1.17 -0.135 0.86 1.22 3 0.3356 0.1746 0.0216 142 135 WMT200605P00135000 06/05/2020 WMT200605000136000 1.07 0.29 0.59 2.17 1 0.3326 0.1532 0.0201 103 136 WMT200605P00136000 06/05/2020 WMT200605000137000 1.5 0' 0.51 4. 9 0 0.5301 0.2593 0.0172 4 137 WMT200605P00137000 30 A/05/2020 WMT20060500128000 87 25 175 05259 2177 00166 5 12 WMT200605012annn quote data Sheet1 +. 0 2.03 0 0 2.02 0.405 0 0 1.75 0 2.15 -0.585 2.61 0 3.23 -0.025 2.24 0 5.22 0 4.4 0.075 4.95 0.425 5.7 0 8 0 6.17 0.37 9.21 0 0 8.1 0 0 9.35 0 0 0 12.68 0 0 14.41 0 0 0 n n Bid Ask Vol IV Delta Gamma Open Int 0 3.25 0 1.6269 -0.0549 0.0019 0 3.05 0 1.4507 -0.0592 0.0023 0 3. 6 0 1.3682 -0.0726 0.0028 0 2.74 0 1.1297 -0.0683 0.0033 0 2.8 0 1.0077 -0.0774 0.0041 0 2.61 0 0.8695 -0.0843 0.005 800 0.09 1.22 0 0.6258 -0.0633 0.0056 0 0.19 0.55 00.4331 -0.0428 0.0059 0 0.4146 -0.0831 0.0104 0.52 2.05 0 0.4076 -0.1575 0.0167 1.13 2.13 0 0.3805 -0.2056 0.0211 1.32 2.2 0 0.3693 -0.2219 0.0227 1.59 2.13 2 0.3404 -0.2338 0.0254 1.53 2.66 0 0.3478 -0.2655 0.0266 2.13 2.870 0.3591 -0.2991 0.0273 1.98 3.1 1 0.321 -0.3137 0.0311 2.3 3.6 0 0.3136 -0.3443 0.0331 2.65 3.65 7 0.3252 -0.3819 0.033 2.93 4.2 0 0.312 -0.4142 0.0352 3.7 4.85 0 0.3412 -0.4511 0.0327 4.5 4.95 3 0.3246 -0.4854 0.0346 18 4.9 5. 9 3 0.3269 -0.5195 0.0343 5.4 6 0 0.3287 -0.5528 0.0338 40 6.2 6.7 0 0.3116 -0.5925 0.035 6.75 7.25 91 0.2836 -0.6416 0.037 7.55 8.1 0 0.3367 -0.6448 0.031 8.2 8.7 0 0.317 -0.6863 0.0313 8.9 10.4 0 0.3249 -0.7088 0.0295 9.25 10.55 00.3659 -0.7071 0.0263 10.2 13.35 0 0.4357 -0.6914 0.0226 11.2 13.7 0 0.4094 -0.7274 0.0227 12 15.5 0 0.4586 -0.7209 0.0205 12.85 15.6 0 0.3848 -0.7846 0.0212 13.65 17 0 0.4594 -0.7566 0.019 14.3 17.05 0 0.4127 -0.8025 0.0187 0 15.1 182 00421 811 00177 7.62 71 0 0 5 - - - + 120% AutoSave OFF sv 5 = walmart quote data Q- Search Sheet Share Comments Check for Updates N O P Q R S T U V Last Sale 0 0.08 0.13 0.17 50 Net 0 0 0 0 0 0 0 0 O 0.53 0.6 34 Home Insert Draw Page Layout Formulas Data Review View Office Update To keep up-to-date with security updates, fixes, and improvements, choose Check for Updates. | 0129 x fox A C D E F G H I J K L WMT (Walmart Inc) 123.35 -1.43 May 07 2020 @ 06:09 ET Bid 122.26 Ask 124.45 Size 1x1 Vol 5769725 Expiration Date Calls Last Sale Net Bid Ask Vol IV Delta Gamma Open Int Strike Puts 06/05/2020 WMT200605C00065000 0 0 56.05 60.8 0 1.78 0.9294 0.002 0 65 WMT200605P00065000 06/05/2020 WMT200605C00070000 0 0 51 55.750 1.5585 0.9267 0.0024 0 70 WMT200605P00070000 06/05/2020 WMT200605C00075000 0 0 46 50.75 0 1.3527 0.9246 0.0028 0 75 WMT200605P00075000 06/05/2020 WMT200605C00080000 0 0 41 45.75 0 1.1731 0.9214 0.0034 0 80 WMT200605P00080000 06/05/2020 WMT200605C00085000 0 0 36 40.750 1.0146 0.9168 0.0041 0 85 WMT200605P00085000 06/05/2020 WMT200605000090000 33.43 -1.57 31 35.75 8 0.873 0.9102 0.0051 0 90 WMT200605P00090000 06/05/2020 WMT200605C00095000 33.55 3.55 26 30.75 1 0.7313 0.9043 0.0063 0 95 WMT200605P00095000 06/05/2020 WMT200605000100000 24.96 0 21 25.75 0 0.6139 0.8915 0.0083 0 100 WMT200605P00100000 06/05/2020 WMT200605000105000 0 0 16.55 20.3' 00.4586 0.8923 0.0111 0 105 WMT200605P00105000 06/05/2020 WMT200605000110000 14.6 -0.475 13.45 14.8 20.3147 0.894 0.0159 5 110 WMT200605P00110000 06/05/2020 WMT200605000113000 12.8 0 10.3 12.95 1 0.3423 0.8141 0.0217 1 113 WMT200605P00113000 06/05/2020 WMT200605000114000 0 0 10.1' 11. 6 0 0.3762 0.7707 0.0225 0 114 WMT200605P00114000 06/05/2020 WMT200605C00115000 10.55 -0.2 8.5 10.4 1 0.3447 0.7595 0.0252 2 115 WMT200605P00115000 06/05/2020 WMT200605000116000 0 0 7.6 9. 6 0 0.3792 0.718 0.0249 0 116 WMT200605P00116000 06/05/2020 WMT200605000117000 0 0 7.55 8.95 0 0.3218 0.7144 0.0296 0 117 WMT200605P00117000 06/05/2020 WMT200605C00118000 8.3 -1.25 7.5 8.15 1 0.3721 0.6639 0.0275 3 118 WMT200605P00118000 06/05/2020 WMT200605000119000 7.13 0 6.5 7.3' 00.3499 0.6399 0.03 0 119 WMT200605P00119000 06/05/2020 WMT200605000120000 7 0 6.2 6.65 0 0.3402 0.6105 0.0317 12 120 WMT200605P00120000 06/05/2020 WMT200605000121000 6. 5 0 5.5 6.1 0 0.3448 0.5771 0.0319 48 121 WMT200605P00121000 06/05/2020 WMT200605000122000 5.3 -0.15 4.8 5.55 4 0.3504 0.5444 0.0318 77 122 WMT200605P00122000 06/05/2020 WMT200605000123000 4.96 -0.44 4.2' 4. 9 2 0.3464 0.5119 0.0324 118 123 WMT200605P00123000 06/05/2020 WMT200605000124000 4.55 -0.05 3.95 4.4 13 0.3507 0.4803 0.032 64 124 WMT200605P00124000 06/05/2020 WMT200605000125000 3.75 -0.475 3.6 3.95 87 0.3439 0.447 0.0324 385 125 WMT200605P00125000 06/05/2020 WMT200605000126000 4 0.435' 2.76 3.65 2 0.3691 0.4236 0.0299 12 126 WMT200605P00126000 06/05/2020 WMT200605000127000 2.88 -0.57' 2.6 3.35 98 0.3522 0.388 0.0306 76 127 WMT200605P00127000 06/05/2020 WMT200605000128000 2.5 -0.625 2.25 2.94' 10 0.3396 0.3524 0.0308 333 128 WMT200605P00128000 06/05/2020 WMT200605000129000 2.35 0.26' 1.57' 2.65 1 0.3149 0.308 0.0315 248 129 WMT200605P00129000 06/05/2020 WMT200605C00130000 1.99 -0.325 1.9 2.22 48 0.3423 0.2971 0.0285 195 130 WMT200605P00130000 06/05/2020 WMT200605000131000 1.8 0.14 1.7 2.1 219 0.3409 0.2698 0.0273 222 131 WMT200605P00131000 06/05/2020 WMT200605000132000 1.8 -0.145' 1.272.33 30.3532 0.2534 0.0256 22 132 WMT200605P00132000 06/05/2020 WMT200605C00133000 1.44 -0.405' 1.26' 4.5' 10 0.3424 0.2243 0.0247 31 133 WMT200605P00133000 06/05/2020 WMT200605C00134000 1.29 0 0.63 1.77 0 0.335 0.1946 0.0232 103 134 WMT200605P00134000 06/05/2020 WMT200605C00135000 1.17 -0.135 0.86 1.22 3 0.3356 0.1746 0.0216 142 135 WMT200605P00135000 06/05/2020 WMT200605000136000 1.07 0.29 0.59 2.17 1 0.3326 0.1532 0.0201 103 136 WMT200605P00136000 06/05/2020 WMT200605000137000 1.5 0' 0.51 4. 9 0 0.5301 0.2593 0.0172 4 137 WMT200605P00137000 30 A/05/2020 WMT20060500128000 87 25 175 05259 2177 00166 5 12 WMT200605012annn quote data Sheet1 +. 0 2.03 0 0 2.02 0.405 0 0 1.75 0 2.15 -0.585 2.61 0 3.23 -0.025 2.24 0 5.22 0 4.4 0.075 4.95 0.425 5.7 0 8 0 6.17 0.37 9.21 0 0 8.1 0 0 9.35 0 0 0 12.68 0 0 14.41 0 0 0 n n Bid Ask Vol IV Delta Gamma Open Int 0 3.25 0 1.6269 -0.0549 0.0019 0 3.05 0 1.4507 -0.0592 0.0023 0 3. 6 0 1.3682 -0.0726 0.0028 0 2.74 0 1.1297 -0.0683 0.0033 0 2.8 0 1.0077 -0.0774 0.0041 0 2.61 0 0.8695 -0.0843 0.005 800 0.09 1.22 0 0.6258 -0.0633 0.0056 0 0.19 0.55 00.4331 -0.0428 0.0059 0 0.4146 -0.0831 0.0104 0.52 2.05 0 0.4076 -0.1575 0.0167 1.13 2.13 0 0.3805 -0.2056 0.0211 1.32 2.2 0 0.3693 -0.2219 0.0227 1.59 2.13 2 0.3404 -0.2338 0.0254 1.53 2.66 0 0.3478 -0.2655 0.0266 2.13 2.870 0.3591 -0.2991 0.0273 1.98 3.1 1 0.321 -0.3137 0.0311 2.3 3.6 0 0.3136 -0.3443 0.0331 2.65 3.65 7 0.3252 -0.3819 0.033 2.93 4.2 0 0.312 -0.4142 0.0352 3.7 4.85 0 0.3412 -0.4511 0.0327 4.5 4.95 3 0.3246 -0.4854 0.0346 18 4.9 5. 9 3 0.3269 -0.5195 0.0343 5.4 6 0 0.3287 -0.5528 0.0338 40 6.2 6.7 0 0.3116 -0.5925 0.035 6.75 7.25 91 0.2836 -0.6416 0.037 7.55 8.1 0 0.3367 -0.6448 0.031 8.2 8.7 0 0.317 -0.6863 0.0313 8.9 10.4 0 0.3249 -0.7088 0.0295 9.25 10.55 00.3659 -0.7071 0.0263 10.2 13.35 0 0.4357 -0.6914 0.0226 11.2 13.7 0 0.4094 -0.7274 0.0227 12 15.5 0 0.4586 -0.7209 0.0205 12.85 15.6 0 0.3848 -0.7846 0.0212 13.65 17 0 0.4594 -0.7566 0.019 14.3 17.05 0 0.4127 -0.8025 0.0187 0 15.1 182 00421 811 00177 7.62 71 0 0 5 - - - + 120%