Week in Review – August 4 – 8, 2014


Option to Profit Week in Review
August 4 – 8,  2014
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Weekly Up to Date Performance

August 4 – 8, 2014

< strong>New purchases for the week trailed both the unadjusted and adjusted S&P 500 by 0.4% during another week of market losses, that were erased with Friday’s large gain. New positions actually lost ground for the week, in sharp contrast to the portfolio of existing open positions which again performed very strongly. 

Following a week with lots of extraneous events that shaped the market’s behavior this week wasn’t very different, as there was really no economic news of interest and no market rattling earnings surprises.

New positions opened this week went 0.1% lower while the overall market was 0.3% higher on both an unadjusted and adjusted basis.

Existing positions again significantly out-performed the market for the week by a large 0.8%. That sort of out-performance is larger than you might expect from the impact of option premiums, but there were no real performance standouts for the week, as was seen the previous week when Family Dollar Stores was part of the equation.

Existing positions actually showed an overall gain of 1.1% for the week, as compared to the market gain of 0.3%. 

Performance of closed positions out-performed the S&P 500 performance by 1.8%. They were up 3.7% out-performing the market by 94.5%. 

It seems as if it has been a while since I’ve had anything good to say about the market.

On a positive note it often works out better that way and this was another week where the bottom line showed improvement and out-performed the broader market by a surprisingly large amount, despite not having any real superstar performers.

The disappointment, and you always have to look for those, was that not enough new covered positions were created and not enough positions were rolled over. The surprising strength on Friday helped to ease some of that disappointment, though, with some additional rollovers and even another new covered position created.

The week ended the way it began.

It was a week that began with some surprising promise with Monday showing a nice gain after last Thursday and Friday’s large losses.

But it was all illusory, as the market deteriorated for most of the rest of the week as the “experts” initially disagreed as to whether it was technical factors being the root cause of international events.

The market then staged an improbable rebound as it seemed to respond news that was was already known, regarding the scheduled end to Russian military exercises on the Ukraine border, as if that actually means anything.

Ultimately, though, none of that really matters.

Whether it’s technical, international uncertainty, lots of rollovers, casino weakness in Macao and all of those other things that are happening. None of it really matters, other than the bottom line.

The truth is that I do like the means and not just the ends, but ultimately no one really cares about the path or the factors.

There was so much news last week and so little expected this week, yet once again we were hostage to quite a bit of the external factors that create fear and uncertainty.

How and why Friday was able to escape from that uncertainty will be a m
ystery, at least to me, but a welcome mystery.

Happily, there were some assignments this week and a few rollovers and even a couple of new covered positions created.

That means that next week there is some cash available and after some of the drops of this week there really do appear to be some bargains to be had, even after a day or two of recovery.

That’s always a good combination, but as with some previous weeks I don’t think that I’ll be too excited about aggressively going into the market to add new positions, but at least there’s both the will and the way to do so.








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:   CY, JPM, LVS, MET

Puts Closed in order to take profits:  none

Calls Rolled over, taking profits, into the next weekly cycleJPM, WFM

Calls Rolled over, taking profits, into extended weekly cycle:  CHK (8/29), LVS (8/22)

Calls Rolled over, taking profits, into the monthly cycle: none

Calls Rolled Over, taking profits, into a future monthly cycle: none

Calls Rolled Up, taking net profits into same cyclenone


Put contracts expired: none

Put contract rolled over: none

Long term call contracts sold:  none

Calls Assigned:  EBAY ($52.50), EBAY ($53.50), GPS ($40), GPS ($42)

Calls Expired:   C, CHK, PFE

Puts Assigned:  none

Stock positions Closed to take profits:  LB

Stock positions Closed to take losses: none

Calls Closed to Take Profits: none

Ex-dividend Positions: MET (8/6 $0.25), WLT (8/7 $0.01)

Ex-dividend Positions Next Week:  CLF (8/13 $0.15)



For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, BX, C, CHK, CLF, COH, DOW, EBAY, FCX, GM, IP, JCP, LULU, MCP, MOS,  NEM, PBR , PFE, 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.