Week in Review – February 16 – 20, 2015



Option to Profit Week in
Review –  February 16 – 20,  2015
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Weekly Up to Date Performance

February 16 – 20,   2015

Finally, a week with a little of everything.

Although I said exactly that last week, too.

New positions beat both the adjusted and  the unadjusted S&P 500 by 2.2% for the week.

Heading into Friday the market was up only 0.1% for the shortened week, but Friday’s strong showing, especially after a dismal start, turned the market toward record levels in both the DJIA and S&P 500, in addition to other indexes.

With 7 assigned positions this week the total number for 2015 is still lagging comparable periods of earlier years, but is finally growing. Thus far the positions closed in 2015 are an average of 5.5% higher, while the comparable time adjusted S&P 500 average performance has been only 2.6% higher. That 2.9% difference represents a 110.3% performance differential that is very unlikely to be maintained through the year, particularly as the average holding period decreases.< /strong>


Despite almost nothing actually going on this week, as the market was virtually unchanged for the first 3 days of trading of this 4 day trading week, it was another good week.

It was nice to string another one to last week’s nice week, as February 2015 has been in complete contra-distinction to January, although comparatively speaking, January 2015 was better than the broad market had performed.

Still, while it is nice to out-perform, it only really matters, in the long run, if that out-performance means that you have more money after sitting down and counting your marbles, beans or whatever you play with.

It has been a while since having so many positions assigned at once and it was good being able to replenish the cash pile.

I always like to run a “what if” when a position gets assigned, That assumes that I would have been smart enough to have sold the assigned position at its price to end the week and then I compare that potential net profit to the net profit of selling at the strike price chosen and adding in the option premiums.

Sometimes, as in this week’s UAL purchase, it would have been better not having sold the options, sometimes it’s a close call, but more often it is a winning situation.

Even then, there are certain positions that I want to immediately buy back, such as GM or TMUS, but put that sort of emotional feeling aside to wait for a better opportunity, that may or may not come in the near future.

With this week’s assignments I have more cash than in a while, but would actually still like to have that pile grow some more.

But, I don’t think that I’ll let that get in the way of putting some of that money back to work as the new monthly cycle gets ready to begin.

With a few positions already set to expire next week and volatility falling, there is suddenly less appeal to looking for extended weekly options, as the premiums are getting less and less attractive as you add more and more time to the contract.

At the moment those positions expiring next week are all in the ballpark for either rollovers or assignments and either of those would be fine, but the more likely assignment of those positions appear to be, the more likely I’d be willing to dip into the cash reserve with the expectation that it was simply being recycled.

With almost nothing now set to expire in the middle of the month and a fair number set to expire at the end of the March 2015 cycle, I will probably focus on a week at a time and continuing to try and recycle whatever resides in the cash pile, as best as possible.

Next week has FOMC Chairman Yellen testifying to Congress, so there may be some ups and downs, especially as the bond market has been more volatile of late and large moves in that area can have some profound effects on equities, as well.

I won’t worry about that too much, as the more you try and apply some logic or thougthful rigor to understanding the market’s dynamic the more you realize that it’s worthless using rational thought processes to try and understand anything that is irrational.

In case you haven’t realized it, for all of the dependence on data, the market is extremely irrational, but you learn to deal with it, just as you learn to deal with a 2 year old.


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:   AXP, UAL, WNR

Puts Closed in order to take profits:  none

Calls Rolled over, taking profits, into the next weekly cycle:  GDX, GDX (puts)

Calls Rolled over, taking profits, into extended weekly cycle:  none

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

New STO:  EMC (3/20)

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned: DOW, GM, LXK, MET, UAL, TMUS

Calls Expired:  AZN, FAST

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: MAT (2/17 $0.38), AZN (2/18 $1.88), RIG (2/18 $0.75), WNR (2/18 $0.30)

Ex-dividend Positions Next WeekSBGI (2/25 $0.16), ANF (2/27 $0.20)



For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, AZN, CHK, CLF, COH, FAST, FCX, HAL, HFC, .INTC, JCP, JOY, LVS, MAT, MCP, MOS,  NEM, RIG, SBGI, 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.