Week in Review – December 1 – 5, 2014

 

Option to Profit Week in Review
 
December 1 – 5,  2014
 
NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED
3 / 3 5 3 3  /  0 2  / 0 0

    

Weekly Up to Date Performance

December 1 – 5, 2014

New positions opened this week out-performed the S&P 500 by 1.5% on an unadjusted basis and 1.6% on an unadjusted basis, as the overall market was only 0.4% higher for the week and the newly opened positions ended the week 1.9% higher.

Positions closed in 2014 have finished 3.6% higher, as compared to 1.9% for the S&P 500 for the comparable holding periods. That 1.7% advantage represents an 83.7% difference in return.

Once again, this was a good week for those without an extensive exposure to the energy sector. History tells us that the pain to investors from low gas oil prices is usually far shorter lasting than the pain to consumers from high prices, but regardless of which side you’re on you can’t wait for the pain to end.

I think I’ll scream if I hear yet another person say that the cure for low oil prices is more low oil prices. I suppose that’s true, but for now I’ve had enough of that remedy and am really ready for some turnaround.

This was another week with relatively little occuring to move markets in either direction. Even 6 Federal Reserve Governor speeches, the ADP Jobs Report, the ECB Policy announcement and the Employment Situation Report were all essentially non-events.

As opposed to the previous week which ended in fairly dramatic form as the energy sector may have had  its capitulation, this week ended on the same whimper as it experienced all through the week, except for the one day when it was acknowledged that low energy prices would be beneficial to the economy.

Somehow that came as a surprise.

The problem, however, may be that history doesn’t have very many examples of recent drops in energy prices due to increased supply. What we do know is that when those drops come because of decreased demand the stock market hasn’t been a particularly inviting place.

To a large degree this is uncharted territory, but the hope is that all of this cheap energy will prompt a little fire under the nascently expanding economy and lead to even more and better paying jobs, which in turn leads to more spending and even a little bit of inflation.

All of that would be good for people and markets.

Expecting a quiet week it was a nice surprise to find it busier than I had been expecting, thanks to some opportunities to find some buyers for calls on uncovered positions and the ability to roll some positions over.

What was more helpful, perhaps, was having another week of lots of ex-dividend positions. I like those days when the surprise deposit into the account is made representing that dividend payment. Between last week and this week there will be lots of those surprises.

With a few assignments this week and some rollovers there are now positions set to expire in each of the next 5 weeks, with the majority of them in the next two weeks. With volatility so low there isn’t much incentive or opportunity to look at the longer term expanded weekly options unless trying to protect a dividend or taking advantage of an upcoming earnings report that drives premiums higher.

For the coming week with some additional cash to spend I would still like to replicate this past week, if possible and look more toward rollovers and new call sales, rather than committing too much of the assignment proceeds into new positions.

If, however, in doing so, I would look at expiration dates for either of the next two weeks in an attempt to have some assignments occur in each of those weeks, as well, in an effort to create some kind of stream of cash for either re-investment of for just hiding away for a rainy day.

Unfortunately, next week doesn’t offer the same kind of flurry of ex-dividend positions, so there may need to be some replacement for the passivity of the past two weeks, but I’m perfectly game if the market is willing to cooperate.

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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:   DOW, MOS, SBGI

Puts Closed in order to take profits:  none

Calls Rolled over, taking profits, into the next weekly cycle:  BX, JOY

Calls Rolled over, taking profits, into extended weekly cycle:  GPS (1/9/15)

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

Calls Rolled Over, taking profits, into a future monthly cyclenone

Calls Rolled Up, taking net profits into same cyclenone

New STO:  DOW (1/2/15), FAST (12/20), GM (12/26), JOY (12/20)

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned: DOW, GPS, MOS

Calls Expired:  EBAY, GDX

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: JOY (12/2 $0.20), HFC (12/2 $0.32), MOS (12/2 $0.25), COH (12/3 $0.34), HAL (12/3 $0.18), NEM (12/3 $0.025)

Ex-dividend Positions Next Week:  GM (12/8 $0.30)

 

 

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, BP, CHK, CLF, COH, EBAY, FCX, GDX, HAL, HFC, .JCP,  LULU, LVS, MCP, MOS,  NEM, PBR, RIG, 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.



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