Option to Profit
Week in Review
May 11 – 15, 2015
|CALLS ASSIGNED/PUTS EXPIRED
|CALLS EXPIRED/PUTS ASSIGNED
|2 / 0
|3 / 0
|0 / 0
Weekly Up to Date Performance
May 11 – 15, 2015
The last few weeks were rescued by Friday rallies. Fortunately this week Friday wasn’t the day to undo the positive price moves during the week, as the monthly cycle came to its end.
Thanks to some good luck and the market deciding that bad retail news was good for it, this turned out to be yet another in a series of nice weeks. Unlike some of those previous weeks, however, I don’t really have too much to complain about, as it was a rare week when everything seemed to click.
The missing piece the past few weeks was the lack of assignments. This week there were finally some assignments to add to the diminished cash reserve.
New positions opened for the week beat the adjusted and unadjusted S&P 500 by 0.1%.
New positions gained 0.4% for the week. The unadjusted and adjusted S&P 500 ended the week having gone 0.3% higher.
Existing positions also finished the week better than the overall market, beating its performance by 0.2%.
With some new positions to finally add to that list, the lots 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 1.8% higher. That 3.5% difference represents a 253.9% performance differential.
It has been nice having a string of weeks that have fulfilled the essential goals that I have each week.
That’s definitely been the case since the end of March, but the trend has been developing since the end of February. From that time through today’s close, the market is unchanged.
That has been a good breeding ground for generating premium related income from old and new holdings, even as assignments have been more sparse than I would ordinarily like to see.
This week was a good example of the kind of mix of transactions that would be great to have every week, but lately just hasn’t been the case.
What made this week feel better than most is
that there wasn’t too much of a need to spend new money in order to generate the weekly income goal.
All positions set to expire this week were either rolled over or assigned and there were a couple of new call positions sold on uncovered lots. Putting all of those trades together it was a busy week.
But with all of that, I do have one complaint.
There were no ex-dividend positions this week.
At least next week will have some of those as there is also now a little more breathing room in terms of cash reserves.
With the market hitting another new high to end the week I’m not necessarily thinking about spending down the limited cash reserve too quickly. With a number of positions already populating next week’s list of expiring positions, I would love to again see a combination of assignments, rollovers and new call sales.
That’s a combination that never really gets tiresome.
With the week following the next one being a holiday shortened week and with a sufficient number of expirations already in place for next week, any new purchases will likely either look at an expiration for next week or possibly for the week after the Memorial Day holiday.
That could potentially leave the possibility of no expiring positions during that week.
Of course, given how quickly the market can change its tone, that strategy can get scuttled fairly quickly, but more and more I am looking at some longer term options, even having now sold some for September 2015, despite the low volatility. That’s being done to get better positioned in the event of any correction that may be ahead. Going further along in time and selecting out of the money strikes seeks to find a balance between risk and share appreciation, while also buying some time for a recovery in the event of any near term correction.
With the S&P 500 at another new record high and with many technicians having looked at the 2120 level as one possibly leading to a breakout, I would love to be able to sit and watch that happen and try to capitalize on existing positions to create the income I like to see get created.
In the event that rocket doesn’t take off and the near term catalyst of earnings is now pretty much out of the way, having a little bit of cash in reserve might not be such a bad thing, but I would rather see those technicians be right and find myself getting more cash reserves from assignments and having that available for the next buying opportunity.
It has now been a couple of months since any correction scare and we may be a little overdue, but I wouldn’t mind if it still took another of couple of weeks for markets to make up their mind and get back into that pattern that we’ve been seeing for the past few years.
(Note: Duplicate mention of positions reflects different priced lots):
New Positions Opened: MRO, SBGI
Puts Closed in order to take profits: none
Calls Rolled over, taking profits, into the next weekly cycle: ANF, DOW, TWTR (puts)
Calls Rolled over, taking profits, into extended weekly cycle: BBY (6/26), GPS (6/26), GPS (6/26)
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 cycle: none
New STO: NEM (9/18), NEM (9/18)
Put contracts expired: none
Put contracts rolled over: none
Long term call contracts sold: none
Calls Assigned: BAC, CY, SBGI
Calls Expired: none
Puts Assigned: none
Stock positions Closed to take profits: ABBV
Stock positions Closed to take losses: none
Calls Closed to Take Profits: none
Ex-dividend Positions: none
Ex-dividend Positions Next Week: MRO (5/17 $0.21), MAT
For the coming week the existing positions have lots that still require the sale of contracts: AGQ, ANF, CHK, CLF, FAST, FCX, HAL, .INTC, JCP, JOY, LVS, MCP, MOS, RIG, WFM, WLT (See “Weekly Performance” spreadsheet or PDF file)
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