Week In Review – September 7 – 11, 2015


Option to Profit

Week in Review


September 7 – 11, 2015


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Weekly Up to Date Performance

September 7 – 11, 2015

This week ended up with no news at all, only a surprise that China didn’t gap lower after having taken a few additional days off.

In what can only be described as a major relief, even as China did head lower to begin the week and even as we were closed in celebration of Labor Day, our markets did not fall behind the curve and instead disassociated from the influence of the overnight Chinese trading.

In return, we actually had a stealth rally and may finally get some closure in the coming week as the FOMC may be poised to raise rates for the first time in nearly a decade.

There were no new positions opened again this week. In the meantime the S&P 500 gained 2.0%

After a number of weeks of out-performing the S&P 500, his week existing positions trailed, due to the weakness seen in energy and materials. They were still higher, but by only 0.5% on the week, reflecting a portfolio over-invested in energy and materials. The past few weeks demonstrate the adage “you live by the sword, you die by the sword.”

For the year the 47 closed lots in 2015 continue to outperform the market. They are an average of 4.8% higher, while the comparable time adjusted S&P 500 average performance has been 1.2% higher. That difference represents a 288.6% performance differential.

It seems that the market is finally at peace with the probability that a rate increase is getting very near at hand.

Even if the data may not seem to be in support of a move right now, considering how slowly economies translate reality into data, a move coming right now may be anticipatory and small enough not to do any harm if it ends up being premature.

People may be finally getting the notion that a rate increase is only going to be a reflection of an improving economy.

That, together with the realization that ours may be the best economy on the block may be giving nervous traders some confidence, especially as record high prices are no longer around to give people a reason to second guess themselves.

Let’s face it. Where else is the world’s money going to go at a time like this?

With this stealth rally, I couldn’t find any real reason to be buying. Part of that is that I really didn’t want to dig deeper into my own pockets to fund those purchases, as while cash has been far too low for my liking, it also hasn’t helped not having had any assignments for a while.

That finally changed this week with but a single assignment, although I was surprised that some $33.50 Best Buy calls weren’t exercised early to capture its dividend. I was actually hoping for that assignment and thought that I was pretty smart having rolled those contracts over twice in a couple of weeks in an effort to get even more than the equivalent of the dividend and still get my cash investment back.

But that’s not the way it worked out.

Still, it was another good week for income development thanks to the hesitant move ahead for the week.

That afforded opportunities to rollover positions as well as to sell calls on existing, but uncovered positions. Add to that another slew of ex-dividend positions and it turned out to be a second successive good week for income production.

Next week is the FOMC meeting and it is also the final week of the September 2015 cycle.

I’m always leery of when those coincide, especially if there’s also a Chairman’s press conference.

I’m not really expecting a sell-off from whatever decision the FOMC makes, but when you have a fair number of expiring positions on the line you are a little more concerned about their fates than you might normally be.

Hopefully we will continue on a path that doesn’t care too much about what will be unfolding in China and instead focus on the good news that promises to become even better news at home.

I don’t expect to be busy with new purchases next week, after a week of not having made any. I would love to see another week offering a chance to create some additional income from what already exists, although next week has only a single ex-dividend position to add to the collection plate.

With the FOMC Statement release coming on Thursday this time around there may be reason to consider pre-emptive moves in advance of that for any positions expiring next week, as two days is little enough time to recover from a bad reaction, but one day is even worse.

But that’s next week. In the meantime we have a few days to see whether China does anything over the weekend to get us thinking differently here on Monday morning.


This week’s details may be seen in the Weekly Performance spreadsheet * or in the PDF file, as well as in the summary below

(Note: Duplicate mention of positions reflects different priced lots):

New Positions Opened:   none

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:  BBY ($33.50 10/23), BBY ($37 10/23)

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

Calls Rolled Over, taking profits, into a future monthly cycle:  HFC (10/16)

Calls Rolled Up, taking net profits into same cyclenone

New STO:  BAC (10/2), DOW (12/18), IP (10/23),

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned: GE

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 NEM (98 $0.025), GM (9/10 $0.36), KO (9/11 $0.33), BBY (9/11 $0.23)

Ex-dividend Positions Next Week:   LVS (9/18 $0.65)

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, AZN, BAC, CHK, CLF, COH, CSCO,FAST, FCX, GDX, GM, GPS, HAL, INTC, IP, JCP, JOY, KMI, KSS, LVS,  MCPIQ, MOS, RIG, WFM, WLTGQ (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.