Option to Profit
Week in Review
September 19 – 23, 2016
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Weekly Up to Date Performance
September 19 – 23, 2016
This week was another in a series that have given a loud and clear message.
If you had any doubt, what is clearly the message is that investors will make believe that they are accepting of increased interest rates, but only if it happens sometime in the future and not today or tomorrow.
That’s what they got and so investors were happy, even as there were some profits to be taken on Friday to end the week.
There was one new position opened this week and it was one designed to tie up money for the full duration of the October 2016 monthly option cycle.
That position was up 3.6% for the week, while the adjusted and unadjusted S&P 500 were both 1.2% higher.
Existing positions continued to feel the decrease in energy prices.
There were no newly closed positions for the week.
It was another interesting week, this time with traders going out on a limb before the FOMC Statement release and betting that no rate increase would be announced and further betting that there wouldn’t be any new hawkish sentiment.
This wasn’t the kind of week that I was excited about getting out in front of, but there was one trade that i couldn’t resist letting pass by.
In hindsight, there should have been others, as well.
For the most part, though, it was a really quiet week, even as the market showed some significant optimism, despite ending the week on a moderately broad, but very orderly sell-off.
What will really be interesting will be next week is that there will be 12 public speeches by members of the Federal Reserve, including Janet Yellen.
If anyone is l
king for clarity, next week is probably not the place for it, but the final word will go to Janet Yellen, who also happens to be the final of the talking Feds to talk next week.
If recent events are any indicator, you may see markets move up and move down with each spin set forward, as it is also clear that there hasn’t been this much dissent on the Federal Reserve ever since transparency became the norm.
I do have 2 expiring positions next week and two ex-dividend positions, in addition to some cash to spend.
With the potential for some rollovers or even an assignment and expiration of a short put contract, I may not have the real need to open any new positions.
I didn’t have the need this past week, either, but it can be hard to look the other way.
At the moment, my preference would be to cash out the chips set to expire and add to cash reserves, but what I’ve found out over the years is that no one cares about those preferences.
It helps to have a Plan B.
Next week does have some meaningful economic data being reported, but we’ll have to wait until Friday to get the GDP.
Coming the morning after Yellen’s presentation, if she has much of a hawkish tone and the GDP comes in stronger than expected, especially with some upward revisions, I think we can expect a sell-off.
Even if rates aren’t raised until December, as that month draws more near, traders are likely to show the same revulsion at the idea of an interest rate increase then, as they do now.
It never gets old.
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: BMY
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: 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 cycle: none
New STO: GME (Nov 2016)
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: LVS (9/20 $0.72)
Ex-dividend Positions Next Week: CY (9/27 $0.11), DOW (9/28 $0.46)
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.