Week in Review – April 6 – 10, 2015

 

 

Option to Profit Week in
Review –  April 6 –  10,  2015
 
NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED
1 / 1 3 5 1  /  0 0 / 0 0

    

Weekly Up to Date Performance

April 6 – 10,   2015

This was a surprising week, to a degree, as the market dug out of the hole created for it last Friday when it had no opportunity to respond to the Employment Situation Report as the futures and bond markets reacted as if it was something akin to the end of the world.

This week there was just a single new position opened and it trailed the both adjusted and unadjusted S&P 500 by a large 1.5%, as the market had a stealth rally and has now finally strung some consecutive days higher together. 

The new position gained 0.1% while the unadjusted and adjusted S&P 500 each gained 1.6% for the week.

Existing positions broke their streak of out-performance and trailed the S&P 500 for the week by 0.2%.

Positions closed in 2015 continue to out-perform the market. They are an average of 5.3% higher, while the comparable time adjusted S&P 500 average performance has been 1.5% higher. That 3.8% difference represents a 257.6% performance differential. That remains unusually high and is associated with the longer period of holding of those closed positions than is more typically the case. I would much rather see that differential be smaller but be based on far more assignments resulting in closed positions. This week saw only one new position added to the list of those closed on 2015.

 

For just a few minutes this week as trading opened, did it look as if this might be yet another in a series of weeks with a significant downward bias that began at the end of February.

Instead, after those few minutes were up and traders realized that the futures market’s reaction to the Employment Situation Report the previous Friday was really unwarranted, it simply did the right thing.

Someone came to the realization that the previous month’s decision to greet the news of a terrible Employment Situation Report with dumping stocks didn’t make too much sense when the same dumping was done the previous month because the numbers were too good.

Unless of course we’re at that point that bad news is bad news and good news is bad news.

As irrational as the market sometimes seems, it doesn’t get to that point very often.

While there really wasn’t too much news this week to move the market in either direction and certainly not in any perceptible size, it did just that.

What made the week pretty impressive is that not only did it not allow the previous Friday’s futures trading a chance to really take hold, but it also recovered from 2 days of late sell-offs that dashed decent rallies, as the week came to an end on a very positive note.

In fact the week came to its close at the highs, leaving the S&P 500 less than 0.5% away from it’s all time high.and volatility once again near its 52 week low and easily in range to  drop below that level with only a single day’s rally necessary to do so.

That positive note is made even more impressive by virtue of it coming right before the financials begin to report their earnings and before the season really gets underway in earnest the following week.

Instead of being cautious or tentative traders went in buying instead of selling, even though you would have been very hard pressed to have found anyone of merit suggesting that there were good times ahead for the market.

The week was a good one, even with some under-performance. The ability to generate income from a nice combination of new options sales and rollovers was welcome and for now I do like the way next week’s expiring positions are set up.

Although I would have liked to have seen more assignments this week the principal goal of generating income was satisfied and next week’s expiring positions are still in reasonable striking range of being assigned or being rolled over.

With a fair number of positions set to expire next week as the monthly cycle comes to an end each of the 4 weeks in the May 2015 cycle already have some positions populating them. It’s been a while since there has been that kind of time diversification.

With the number of positions for next week already sufficient, as long as there continue to look as if there may be some in line to be assigned, my goal for next week would be to be able to rollover whatever is possible in order to generate the week’s income.

With only a single assignment I would like to preserve cash, particularly since there’s not too much to preserve at the moment and I would like to see that reserve grow.

New purchases for next week, if any, would likely equally look at a weekly expiration as it might at an expanded weekly. However, with volatility going even lower it does get more difficult to consider going out too many weeks into the future.

The exception may be for those positions that will have earnings entering into the equation, as the banks really get things going next week and the next few weeks may be fairly hectic as earnings pour in.

 



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:   WFM

Puts Closed in order to take profits:  none

Calls Rolled over, taking profits, into the next weekly cycle:  none

Calls Rolled over, taking profits, into extended weekly cycle:  KO (5/1), UAL (5/1), WFM (4/24)

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

Calls Rolled Over, taking profits, into a future monthly cycleGDX (5/15), GPS (5/15)

Calls Rolled Up, taking net profits into same cyclenone

New STO:  BAC (5/15), CHK (5/15), LVS (5/8)

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned: HAL

Calls Expired:  none

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: GPS (4/6 $0.23), WFM (4/8 $0.13)

Ex-dividend Positions Next WeekABBV (4/13 $0.51), CHK (4/13 $0.09), FCX (4/13 $0.05)

 

 

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