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