Week In Review – September 21 – 25, 2015


Option to Profit

Week in Review


September 21 – 25, 2015


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Weekly Up to Date Performance

September 21 – 25, 2015

This was a week of real indecision.

Following last week’s bad reaction to news of no interest rate increase, the best we could do this week was a small bounce back on Monday.

As we flirted in and out of correction I bought more new positions in a single week than for quite some time.

The 4 new positions out-performed the unadjusted S&P 500 by  2.0% and also out-performed the unadjusted S&P 500 by 2.0%.

Those positions were 0.6% higher for the week while the unadjusted S&P 500 finished 1.4% lower and the unadjusted S&P 500 was 1.4% lower.

Existing positions trailed the S&P 500 by 0.9% for the week. Their relative performance was again dragged down my energy and materials.

For the year the 52 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 1.1 % higher. That difference represents a 357.4% performance differential. 

While this was a week that spent most of its time exhibiting weakness, it did feel like a good time to add some new positions as the market was still bouncing back and forth, but was staying relatively close to the line distinguishing between a market in correction and one that isn’t.

Those large bounces back and forth are helping to drive up volatility and the volatility rise is making premiums more attractive.

Combined with prices on stocks that may already be in their own personal bear correction, that becomes more and more attractive, especially when there’s also a dividend involved.

The various strategies that can be used definitely increase as the volatility does, as well, as there is more premium built into in the money options and greater advantage to the Double DIp Dividend trades, even if the dividend ends up not being captured.

The market got off to a good start on Monday and for most of the day looked as if it was going to end the week even better than how it had started, as Janet Yellen may have removed some uncertainty late Thursday, after 3 really weak days.

Those days were nothing more than the market being confused and disappointed.

That’s a bad combination.

Fortunately, despite the weakness seen in the overall market, it wasn’t too bad of a week, with opportunity to create some income from the new positions that were opened, as well as the rollover trades that were able to be completed and a single ex-dividend position.

This was a good week to see a number of past ex-dividend positions suddenly show up as cash in the account and that’s always appreciated, although this week did have a decent number of active trades generating income. The dividends are more appreciated in those weeks where there isn’t very much trading to be done.

After having dug deeply to open those new positions this week I was especially happy to see the 2 assignments get made, but would have been happier if there were some more, but I won’t be complaining, given how the week was looking as it was getting ready to end the week.

With a little bit of cash and a small number of positions set to expire next week, including some positions going ex-dividend, there is some more chance to create some additional income next week.

With the manner in which the market closed the week I’m not entirely certain what path looks predominant as the coming week gets ready to open. At the moment, I’m not as positive about its direction as I was early this week. I was definitely willing to spend cash this week, but am not certain I’ll feel the same way when Monday gets here.

With next week ending with an Employment Situation Report and lots of key Federal Reserve people giving speeches, including Janet Yellen and Stanley Fischer, there’s good reason to believe that they’ll be re-inforcing the message that the interest rate hike is coming in 2015.

Janet Yellen did that yesterday and the market seemed to like that relative certainty, so next week there could be more of the same and a strong Employment Situation Report could really drive home the confidence that the market is developing that it can still thrive as interest rates begin a slow climb higher.

Here’s to good news, but I wouldn’t mind staying at these levels for a while and keeping volatility at these higher levels, as well.


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:   CY, BAC, DOW, GE

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:  GE (10/9), HFC (10/23)

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 Assigned: ANF, BAC

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 CY (9/22 $0.11)

Ex-dividend Positions Next Week:   DOW (9/28 $0.42), EMC (9/29 $0.12), CSCO (10/1 $0.21)

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