Week in Review – February 23 – 27, 2015



Option to Profit Week in
Review –  February 23 – 27,  2015
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Weekly Up to Date Performance

February 23 – 27,   2015

Finally, a week with almost a little of everything.

The last few weeks have been good ones for a more varied trading experience.

New positions beat the unadjusted S&P 500 by 2.1% and the adjusted index by 2.2% for the week. That unusually large beat was due to a combination of rollovers, dividends and
decent performance of the shares themselves, despite a late day sell-off in UAL, as compared to the overall market, which was essentially unchanged for the week.

The market was up only 0.3% for the week, closing on a mildly negative note, having been unchanged over the previous 4 days. By contrast, new positions were 1.8% higher for the week.

With only 1 assigned positions this week the positions closed in 2015 are an average of 5.4% higher, while the comparable time adjusted S&P 500 average performance has been 2.5% higher. That 2.9% difference represents a 116.5% performance differential.


Other than a brief catalyst from Janet Yellen, this was an exceedingly boring week as far as market news and market reactions.

Even retailer earnings reports and the GDP release did nothing to move markets in either direction as there was almost a complete embargo on anything really newsworthy.

While that brings volatility lower it was still a good week, especially if there was some exposure to those positions that remain volatile.

While stocks have given up the volatility over the past few weeks after having started the first month of the year having a triple digit move or 200 point swing each and every day, the past month has been much less exciting, at least in most stocks.

Meanwhile precious metals and interest rates have been all over the place and if you were among those that established a position in the Gold Miners ETF, either as a covered call or a put sale, you know exactly how volatile that position has been, although it has essentially gone nowhere, but has offered lots of trading opportunities in the underlying option contracts.

Add to that volatility in the energy sector, both on a daily basis and on an intra-day basis.

Just as the energy sector was punishing on the way down, it can be rewarding on the way up. The difference is that the way down was very sudden and came as a complete surprise to nearly everyone. By the time it happened it still took option premiums a long time to catch up.

Lately, however, as energy prices have been stabilizing and in the eyes of many teetering between going higher or just taking a rest before their next plunge, those option premiums have been reflecting that uncertainty and at least offering a little bit of reward in exchange for taking some risk.

There also has to be some uncertainty about what the next week or weeks will bring to stocks.

Whatever hope I had for retailers providing some optimistic earnings and future guidance, that really didn’t materialize this week and to make matters worse the previous quarter’s GDP was revised fairly significantly downward.

To date, that means that whatever extra money people are seeing in their pockets still isn’t showing up in the bottom line or in anyone’s projections for their future bottom lines.

With the important part of earnings season now over you have to wonder what will be the next catalyst higher, as we’ve again become used to seeing new daily highs.

While there turned out to be no catalyst this week it did turn out to be a good week to add some new positions, especially as there were chances to generate some additional revenue with rollovers and a decent number of positions going ex-dividend.

Next week, whatever it may bring, will at least bring an even larger number of ex-dividend positions. At the very least ge
tting those dividends gives the appearance of getting something while you wait for something to happen.

With only a single assignment for the week and the proceeds of the early closure of Western Refining going back into Halliburton, my cash pile won’t be as big as I thought it might be just a day earlier. With a decent number of positions expiring next week and all currently in the range for either rollover or assignment any new purchases will probably look at both weekly expiration dates and the following week, where there are currently no expiring positions.

However, with volatility again so low, there’s little desire to look too far ahead, especially since everything can change in just a day’s worth of trading, especially if some external or international events decide to finally have some influence on our shores.







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:   HAL, MRO,  LXK, SNDK, UAL

Puts Closed in order to take profits:  none

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

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:  none

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls AssignedAXP

Calls Expired:  LVS

Puts Assigned:  none

Stock positions Closed to take profits:  WNR

Stock positions Closed to take losses: none

Calls Closed to Take Profits: none

Ex-dividend PositionsSBGI (2/25 $0.16), LXK (2/26 $0.36), SNDK (2/26 $0.30), ANF (2/27 $0.20)

Ex-dividend Positions Next Week: HAL (3/2 $0.18), JOY (3/2 $0.20), MOS (3/3 $0.25), COH (3/4 $0.34), BAC (3/4 $0.05), HFC (3/6 $0.32)



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.