It's the rumor that's moving the world's largest retailer.
Shares of Wal-Mart had been strong on Friday and Monday, buoyed by a rumor that activist investor Bill Ackman will take a stake in the mega-cap stock. There is no confirmation behind the trader talk, but it certainly seems to be a driver behind both the stock and Wal-Mart options.
Bill Ackman's firm, Pershing Square Capital, did not respond to a request for comment.
On Monday, as Wal-Mart shares rose to the highest level of 2014, Wal-Mart options were hopping, with four times the stock's average daily volume trading. Eighty-five percent of that volume was in the calls, rather than the puts, and in one of the biggest trades, a trader bought 29,000 January 82.50-strike calls for 64 cents per share.
This trade, which cost nearly $1.9 million in options premium, only pays off if Wal-Mart shares rise to a fresh all-time high within months.
Notably, the bullish bet also comes ahead of earnings, but expectations are low for Thursday's results given that Wal-Mart already reduced its sales growth forecast in October.