The market greets WMT

Not much to write about today.  The biggest news is that the NFL might review its “take a knee” policy and that as you know would overshadow any economic news.  I did find headlines about the Chinese government taking an “active” role in the big Chinese internet companies and I am thinking long term that cannot be good.  BABA and BIDU were both done a bit after torrid runs.  My story for today is WMT because it broke the 3 day rule I just wrote about and what the heck I own it too.

It seems that when AMZN bought WFM, WMT got smacked into the mid-70s, when folks thought it was over for the big Bentonville retailer.  Now that everyone is discovering that WMT has a massive foot print and a connection to the internet things are looking up.  What I am noticing is that longer term IV is perking up a bit.  It is tough to sell IV at 15% in a stock that move $8 in 5 days.

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AMZN is worth $200 billion more than WMT.  Granted AMZN invented internet convenience but I think WMT is learning fast 20 years later.  The fact they spent money on employees was probably the best tell they could give that a big upgrade was about to happen.  Realized vol has been creeping up in WMT too.  That really should not happen with a mega cap stock but I think it is because folks are buying calls.  I like that idea and 16% IV seems ok.

 Disclosure:  WMT positions

The trade

Buying WMT Jun2018 95 calls look as tasty as a rotisserie chicken.   One can hedge slightly with WMT Jun 2018 70 puts.

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