I’m making a couple of leveraged bets on a strong Christmas shopping season.

music selection:  “Give To Live” — Sammy Hagar

I’ve noticed in the last couple weeks that the crowds at Wal-mart and the traffic near local malls has been very robust.  Maybe even a little annoying.  I’m speculating that Black Friday and Cyber Monday are going to set records and the shares of Wal-Mart (WMT) and Amazon (AMZN), respectively, will rally.  To that end, I’m buying long calls with the 6DEC2019 expiry at the money.  I’m going to risk 1,500 dollars or so on each bet and could realistically double my money.  This isn’t for the rent money so don’t play the “home game” with anything you can’t afford to lose.

I’ll wait until Friday’s session to buy the Amazon calls (they will lose a substantial amount of time value in the two days time.)  Today, I’m buying 20 contracts of WMT191206C00120000 for 75 cents a share.  That puts an even $1,500 at risk.  A two percent move up in the underlying on Monday (after WMT reports Black Friday projected revenue) could double my money or more.  A sales whiff will cost me dearly.  I’m relying on the anecdotal evidence I see on the roads and at my local Wal-mart store to predict robust sales.  Wish me luck!

Devour your prey raptors!

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Speculating on Christmas Shopping

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2 thoughts on “Speculating on Christmas Shopping

  • November 27, 2019 at 9:16 pm
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    That’s a very uncharacteristic trade.

    Best of luck, but investors should note that the ultimate cost of tariffs are baked into the total sales numbers being reported, so even if people buy less imported stuff, it will cost them more and should in theory result in lower margins for the retailers. All this should be baked into prices, in theory, but I bet Wall Street is having trouble estimating their exact impact. One would have to know a lot about what’s selling, when it was purchased, and factor in product substitution at some unknown rate. I foresee a bit of surprise one way or the other.

    Reply
  • December 3, 2019 at 9:10 pm
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    My friend just killed it on some Best Buy long calls, here’s hoping you do the same!

    Reply

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