Trades For Today: Exercise of Wal-Mart (WMT) options, Diageo, Japanese Yen.

Allowed Walmart  (WMT) to be called away at $45.00 (Friday). 
During a panic about same store sales and September of 2005 I bought WMT shares at $43.02 (which I quickly sold) and some December 2005 45 strike calls for $0.95.  I held the calls and sold in late November  sold June 2006 45 Strike calls for $5.86 (net).

My idea was that if WMT fell below 45 I would buy the stock.  At the time, my thinking was that even if Walmart's sales never grew any faster than GDP, the stock still had good value below 45.  If Walmart stayed above 45 I'd keep the difference between the price of the December calls bought ($0.95) and the price of the June calls ($5.86).  Of course, I had all the downside risk from December to June, but I was comfortable with that.

Added slightly to Diageo (DEO) position. 
Diageo is the cheapest of the spirits and beverage stocks.  Also, I like the global nature of their products.

Covered part of short USD / Long Yen position.
Long term I like this position, but it is moving against me.  Prudent risk management says I should reduce the position to a size I am comfortable holding for a while.  With US interest rates going higher and uncertainty around Japanese interest rates, I would rather put the position back on when the interest rate differential seems more clear.

Disclosure: Nothing in this blog is meant to be a recommendation to buy or sell.  I do not give investment advice.  Do your own research.  Do not rely on anything in this weblog to make investment decisions.  I do not log all my trades here. I only those that I think might be interesting. Consult your own investment professional before buying or selling any security.

I own Diageo (and may buy more).  I own Walmart (and am still short some Jan 2007 45 strike calls against it).  I have a futures position Long Yen/Short USDollar.