Week in Review – February 21 – 24, 2014


Option to Profit Week in Review
February 17 – 21, 2014
5 / 5 4  9 6 / 0 5  / 0 0

Weekly Up to Date Performance
February 17 – 21, 2014
New purchases beat the time adjusted S&P 500 this week by 1.8% and also surpassed the unadjusted index by 1.7% during a week that had no real news or no meaningful events.
The market showed an adjusted loss for the week of 0.1% and unadjusted loss of 0.2% for the week, while new positions gained  1.6%.
For positions positions closed in 2014, performance exceeded that of the S&P 500 by 1.3%. They were up 3.2% out-performing the market by 70.5%.
It was a busier trading week than I had expected and that’s usually a good thing. In all, there were 18 positions traded, which is something that we haven’t seen for some time.
While there was little to move markets this week, they did move, but the alternating currents left it going nowhere. As you probably know, those tend to be the best weeks. When the market goes nowhere you’re much more likely to get to your own destination.
While I have no complaints about 2013, I would much rather see lots of aimless wandering going about. This was certainly a week of aimless wandering.
While 5 new positions were opened this week, there was an opportunity to gain additional cover on some positions and rollover a number of others. In addition to creating  the income streams that may be a primary goal for some and a secondary goal for others, the net number of outstanding positions was decreased, which has been a goal of mine for the past two months.
Best of all there were assignments to help replenish cash reserves bringing them to a level where it’s possible to establish new positions in the coming week as the opportunities arise, as well as maintaining enough in reserve to capitalize on a rainy day.
As an added bonus there were lots of dividends this week and a quick review of my holdings shows that there’s about an additional 0.3% ROI in dividends receivable over the coming couple of weeks. Unfortunately, the coming week doesn’t appear to have quite as many dividend opportunities, but that day will come again.
With the opportunity to restock cash reserves and no real sense of urgency from any direction, regardless of an overall listless appearing economy, I continue to have some short term optimism as the new monthly option cycle begins on Monday.
As long as am whining about the lack of new dividend plays in the coming week, I’ll also add to that bemoaning the sudden return of volatility to its already low levels. A week or two taste of the good times had me wanting more, but the market has ordained otherwise.
That means the likelihood of less reliance on longer term contracts as there is very little reward for going out in time, except for dividend paying stocks or as part of a strategy to cushion a position against potential earnings related shocks.
As much as I do want to be staggered in terms of contract times the lower premiums make that difficult to do right now.
While next week may not have much in the way of dividends and while I am currently focusing on less volatile positions, for the more reckless out there there may be some good earnings related trades. Those tend to be in the higher volatility names and the earnings event can make them even more so, so it is definitely an acquired taste.
However, some of the best recurring opportunities can come with these kind of trades, such as when puts are assigned, as long as they are done so while the shares trade in the neighborhood of the strike price used.
But even without those more adventurous trades there does appear to be some opportunities in more sedate names for next week.
With cash in hand to start the week and no obstacles obviously in the way I’m looking forward to picking up some replacement positions. However, while I normally prefer a weak opening to the trading week in order to secure some cheaper purchases prices, I wouldn’t mind the market continuing with its rebound from the lows of two weeks ago, as I would like to continue having the opportunity to find new cover for some positions, even if it means resorting to “DOH Trades.”
Then again, unlike the white powder on the Benjamins you used to pay for that  fedora , no one will ask you whether you’re paying with money derived from those DOH Trades.

This week’s details may be seen in the Weekly Performance spreadsheet * or in the PDF file, as well as as in the summary.below
(Note: Duplicate mention of positions reflects different priced lots):

New Positions Opened:  GE, LB, LO, MOS, RIG
Puts Closed in order to take profits:  none
Calls Rolled over, taking profits, into the next weekly cycleAPC, CSCO, LOW, MA, MSFT, YUM
Calls Rolled over, taking profits, into extended weekly cycle
CallsRolled over, taking profits, into the monthly cycle:
Calls Rolled Over, taking profits, into a future monthly cycle:  ANF, LB, RIG
Calls Rolled Up, taking net profits into same cyclenone
Put contracts sold and still open: none
Put contracts expired: none
Put contract rolled over: none
Long term call contracts sold:  none
Calls Assigned:  CHK, CPB, FAST, GPS, GPS, MSFT, VZ
Calls Expired: CLF, FAST, FCX, INTC, WY
Puts Assigned:  none
Stock positions Closed to take profits:  none
Stock positions Closed to take losses: none
Calls Closed to Take Profits: none
Ex-dividend Positions:  CLF (2/19 $0.15), GE (2/20 $0.22), LB (2/19 $0.34), MSFT (2/18 $0.28), RIG (2/19 $0.56), WLT (2/18 $0.01)

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, C, CLF, COP,DRI, FCX ,INTC, LB, JCP, MCP, MOS,  MRO, NEM, PBR, PM, RIG, TGT, WFM, WLT (See “Weekly Performance” spreadsheet or PDF file)

* If you don’t have a program to read or modify spreadsheets, you can download the OpenOffice Suite at no cost.