Week In Review – May 23 – 27, 2016


Option to Profit

Week in Review


May 23 – 27, 2016


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Weekly Up to Date Performance

May 23 – 16, 2016

This may have been the week that the market grew up.

That’s because they embraced the idea of higher interest rates coming as soon as in 3 weeks.

Although, if you remember what happened the last time the market grew up you might recall that embrace loosened very fast.

The market had a really spectacular week, with the S&P 500 gaining 2.3% on an unadjusted basis and 2.5% when factoring in the day in which that new position was opened.

Although the sole new purchase for the week gained 1.6%, it couldn’t keep up with the market’s performance and trailed the market by 0.7% on an unadjusted basis and 0.9% on an adjusted basis.

Existing positions, though, were only 0.7% higher, as they were the previous week. Their lack of relative performance was due to materials and precious metals having a rough week.

With no new assignments on the week those positions closed in 2016 were 8.2% higher, while the comparable performance for the S&P 500 during the same holding periods has been 1.6% higher. That represents a 418.2% difference in return on closed positions. Unfortunately, there are still very few closed positions on the year.

For the first time in a couple of weeks the market actually had a theme and it wasn’t oil.

This week the market embraced the idea that a slight increase in interest rates would be good for all involved.

With a slight upward revision in GDP and some decent earnings numbers as that season is coming to a close, there was maybe some reason to believe that the economy wasn’t so bad, after all.

Even with a more hawkish tone from Chairman Janet Yellen, markets were upbeat as the S&P 500 no stands only about 1.5% from its all time high.

Of course, that brings us back to the last time that the market embraced the idea of a rate increase coming soon.

That optimism vanished very quickly and took us into the first 6 weeks of 2016.

That wasn’t pretty.

This past week was another in a series of very quiet trading weeks.

While I am overloaded on energy, I couldn’t resist adding more shares of another in the sector, mostly to capture its dividend and the expectation that it was in a bottoming out pattern.

In fact, in the coming week, the only 2 expiring positions are both in the energy sector and I wouldn’t mind continuing to roll them over, even if they end up being in the money.

I may change my mind on that as the week progresses.

That’s because I still may be able to find a reason to add some new positions in order to generate some income and I also have 4 positions that are ex-dividend next week.

I’d be more inclined to roll an in the money positions over if I didn’t open any new positions, as I wouldn’t have quite the same need to replenish cash.

With a holiday shortened week coming up and volatility dropping, there may not be too many appealing premiums out there for a weekly contract, so I may be looking more at extended weekly options or even adding to the names that already have monthly June 2016 contracts coming up for expration.

For the next few days I won’t think about any of those things too much.

Happy and safe Memorial Day to all.

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:  Holly Frontier

Puts Closed in order to take profits:  none

Calls Rolled over, taking profits, into the next weekly cycle: Holly Frontier

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 Assigned:none

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  HAL (5/27 $0.18), HFC (5/25 $0.33), IP (5/25 $0.44)

Ex-dividend Positions Next Week:  MOS (5/31 $0.275), ANF (6/1 $0.20), BAC (6/1 $0.05), COH (6/1 $0.34)

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