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Week in Review – March 16 – 20, 2015

 

 

Option to Profit Week in
Review –  March 16 – 20,  2015
 
NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED
1 / 1 5 2 2  /  0 5  / 0 0

    

Weekly Up to Date Performance

March 16 – 20,   2015

This was a difficult to describe week.

Each and every day, followed the trend that began with the last 2 days of the past week and closed at a triple digit change in the direction opposite that of the previous day’s close.

That’s something you don’t see very often.

There was only a single new position opened for the week. It beat the adjusted S&P 500 by 1.2% but trailed the unadjusted S&P 500 by 1.0% in a week that the market again followed only a single story, but lots of interpretations of the meaning of that story.

The new position was 1.6% higher for the week, while the unadjusted S&P 500 finished 2.7% higher and the adjusted S&P 500 was only 0.4% higher, as the sole purchase for the week was on Thursday, effectively undoing much of the gain subsequently seen on Friday to close the week.

Positions closed in 2015 continue to out-perform the market. They are an average of 5.6% higher, while the comparable time adjusted S&P 500 average performance has been 1.9% higher. That 3.8% difference represents a 202.3% performance differential.

 

All eyes were focused on the FOMC this week and the market really didn’t know what it was looking for, nor what it really wanted.

Sometimes, just like a small child, who is more interested in just receiving something, there wasn’t much attempt to discern whether what was received was good, bad or indifferent.

It’s not very clear that the market got anything resembling clarity to the question of when the FOMC will begin to raise rates, but it did act as if all was now crystal clear.

The market itself seems to be telling a different story and it’s far from one that’s crystal clear.

This is what the past few days of trading looked like at the closing bell:

This is sort of ridiculous.

What makes it ridiculous is that there’s been basically no volatility during the course of these past few days. The market, with the exception of a single one of those days has ignored the pre-open futures trading and just headed in a single direction and had traded with almost no intra-day variation.

The exception to that lack of intra-day variation was this past Wednesday when the FOMC Statement was released.

With all of this faux volatility, there actually hasn’t been much real volatility, even as
the uncertainty has seemed to be increasing. In fcat, the volatility is about at the last low point, which was at the beginning of December 2014, even though it may not really feel like that.

This was a difficult week to want to make any commitments and was a perfect example of how the slightest change in your timing could have made such a significant difference in outcomes.

Looking forward to the next week there’s really no additional information that’s available to push in one direction or another.

For those who look at charts, looking at the net change in the closing level of the DJIA over the past 7 trading sessions shows lower highs and higher lows, so there will surely be someone who will say that the prevailing pattern is for a breakout in prices to the upside.

I have a hard time embracing that, but the reality is that for more than 2 years that really has been the case, regardless of what the charts have looked like.

I was happy to see positions go along for the ride this past week and was especially happy to have a chance to find some new cover for some of the previously uncovered positions. Although there were a couple of rollovers and a couple of assignments, there were too many expired positions to end the March 2015 option cycle.

With some additional cash available next week being added to the pile and with only 2 positions set to expire next week, the greatest likelihood is that any new positions would primarily look at next week’s expiration, rather than in forward weeks. With a smattering of positions already sprinkled through the individual weeks of the April 2015 option cycle and with premiums again following volatility lower, there’s little incentive to look at further diversifying positions by time of expiration.

While I wouldn‘t mind letting go of some of the cash reserve in order to pick up some new positions next week, my preference would be to have another week such as this past one. I’d prefer to generate the income from existing positions, where possible and put as little additional capital at risk until there is really some clarity.

That should begin fairly soon as earnings season is about to begin anew in just a couple of weeks as we may finally get some information regarding the impact of falling energy prices as well as the impact of the strengthening US Dollar.

 



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

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



New Positions Opened:   MET

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:  LXK, MRO

Calls Rolled Up, taking net profits into same cycle:  none

New STO:  AZN (4/24), GDX ($21 4/10), GDX ($20 4/2), HAL (4/10), KO (4/10)

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned: GME, SBGI

Calls Expired:  BAC, BP, DOW, EMC, GDX

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 (3/19 $0.65)

Ex-dividend Positions Next Week: DOW (3/27 $0.42)

 

 

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, CHK, CLF, COH, FAST, FCX, GDX, HAL, HFC, .INTC, JCP, JOY, LVS, MAT, MCP, MOS,  NEM, RIG, WFM, WLT (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.



Posted on

Week in Review – March 9 – 13, 2015

 

 

Option to Profit Week in
Review –  March 9 – 13,  2015
 
NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED
2 / 2 1 2 2  /  0 4  / 1 0

    

Weekly Up to Date Performance

March 9 – 13,   2015

This was another bad week, further separating March from February and making it look like January, as there continues to be very little reason for the back and forth kind of motion that is leaving the market with a bias toward the downside.

New positions beat both the unadjusted and adjusted S&P 500 by 0.3% in a week that the market again had no real stories to react to and just like the previous week seemed to trade in a different vacuum each day.

However, despite the relative out-performance, this was was just like last, as those positions still were losers. The 2 new positions were 0.6% lower while both the adjusted and unadjusted indexes were 0.9% lower.

Existing positions, continued their second week under-performing the overall market as energy and metals continued last week’s weakness, abandoning their February gains.

Positions closed in 2015 continue to out-perform the market. They are an average of 5.0% higher, while the comparable time adjusted S&P 500 average performance has been 1.9% higher. That 3.2% difference represents a 169.9% performance differential.

 

This week was one that was predominated by interest rates, currency exchange rates and declining energy prices again.

What made some of the week’s action hard to understand and certainly hard to take was hearing such people as Blackrock’s Chief Global Investing Strategist blame the week’s sharp decline on the sudden realization that currency issues were going to impact corporate earnings.

It’s not clear who he was referring to as having just come to that sudden realization, but I can tell you that the people least likely to have come to that realization on a timely basis are not the people that move markets.

I can only assume that he was referring to portfolio managers.

You would have thought that they would have known better, especially since there are some fairly well understood cycles and “cause and effect” pairs that have demonstrated themselves as inviolate over time.

It doesn’t take too much of a genius to know that a country with a trade deficit and seeing the value of its currency climb significantly in relationship to its trading partners is likely going to see that deficit rise and is going to see corporate earnings dependent upon trade with those countries with weakening currencies decrease.

So why the sudden surprise by those who should know more and better than you and I?

This, like last week wasn’t one to be very pro-active, as there really wasn’t any justification for what was going on. Although some stock prices started looking more appealing, the uncertainty surrounding markets could have been making all of those bargains illusory.

Most week my internal metric is to see a total of 10 trades get performed. That includes some combination of new positions, new STO trades, rollovers and expirations. Most weeks that number is achieved, but not this week. Unlike previous weeks when it was a mistake to count those chickens before they were assigned, this week didn’t offer much chance of even getting them rolled over, as all of those orphaned positions were either in energy or metals.

It was a set back to see some positions expire without the chance to roll them over, although I was happy to see a couple of positions assigned and to at least create some additional opportunity to recycle the cash next week, or decide to just let it add to the pile.

As March begins to resemble January more and more, those days of rapid mini-corrections in the 3-5% range may be back. In January those happened every 2 weeks, although as soon as February started they were a thing of the past.

Based on the closing weakness on Friday, despite the losses being cut in half in the final 30 minutes,  I’m not ready to think that March will be anything other than a copy of January. But I do hope that just like January it is limited in time and scope and at least gives way to a nice April.

With a little bit of cash in hand and a fair number of posit
ions set to expire next week as the monthly option cycle comes to its end, normally I would think about the possibility of letting any new positions bypass the coming week and look at some expiration dates using extended options.

However, the market hit of the past 2 weeks isn’t leaving next week’s positions in likelihood of being assigned, At this point I would be very happy to be able to roll them over, but the damage of the past two weeks was fairly significant.

With the market now down about 3% from the February 2015 highs, there’s still plenty of room for more downside, unless March really takes on a January character and sticks to repeating 3% declines in fairly close succession.

For the most part much of next week will be focused on what the FOMC may or may not say. The good news is that an indication that interest rate hikes are really coming sooner or an indication that they’re coming later, just as Yellen suggested just 2 weeks ago, could both be a tonic for what the last two weeks have wrought.

 

 



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

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



New Positions Opened:   KO, UAL

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:  BAC

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:  GME

New STO:  SBGI (4/15/15)

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned: SNDK, UAL

Calls Expired:  CHK, GDX, HAL, KO

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 (3/10 $0.02), KO (3/12 $0.22), GME (3/13 $0.36)

Ex-dividend Positions Next Week: LVS (3/19 $0.65)

 

 

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, AZN, CHK, CLF, COH, FAST, FCX, GDX, HAL, HFC, .INTC, JCP, JOY, LVS, MAT, MCP, MOS,  NEM, RIG, SBGI, WFM, WLT (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.



Posted on

Week in Review – March 2 – 6, 2015 (Close)

 

 

Option to Profit Week in
Review –  March 2 – 6,  2015
 
NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED
2 / 2 0 5 1  /  0 0  / 1 0

    

Weekly Up to Date Performance

March 2 – 6,   2015

Just an awful week to begin a month that is, so far, in as much contrast to February as February was to January.

If you don’t recall, January wasn’t a very good month.

New positions beat both the unadjusted and adjusted S&P 500 by 0.5% in a week that the market had no real stories to react to and seemed to trade in a
different vacuum each day, until the very end of the week.

The 2 new positions, despite beating the index, were still 1.1% lower while both the adjusted and unadjusted indexes were 1.6% lower.

Existing positions, however, under-performed the overall market by an usually large 2.0%, in part due to earnings or monthly sales related price drops in such companies as JOY and ANF. Additionally, energy and metals were also weak, undoing some of the previous month’s strength that contributed to out-performance.

Positions 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 2.3% higher. That 3.0% difference represents a 133.5% performance differential.

 

The first 3 days of this week traded with unusual swings and very differently from the pre-opening futures that generally serve to set up the tone for the trading day. None of those days had any kind of news to warrant any kind of sizeable gains or losses, nor was there anything to warrant mid-day corrections.

Yet all of those things happened and on a repeating basis.

The only real news for the week came on Friday morning with the release of the Employment Situation Report and at least that was something that you could point your finger at if you were looking to blame something for another Friday plunge.

For most of the week without any real cues there was very little to react toward and the market was essentially very irrational all during the course of the week, with the possible exception of Thursday, which was simply a day with no news and no activity in the markets. Even oil, precious metals and interest rates traded in a steady state fashion on that day, while doing anything but for the remainder of the week.

On Friday, not to say that the market’s reaction to great employment news was irrational, but at least there was something that might paint a picture for the direction ahead or the prevailing mindset going forward.

The “good news is bad news” people made a return after a period of hibernation and they sold off in a big way in the belief that the employment statistics mean that the FOMC interest rate hikes are coming sooner than Janet Yellen had suggested just a week ago.

To me, it seems implausible that Janet Yellen would lead us down an illusory path or would so suddenly find herself changing her tone, yet that’s how the market reacted.

Forget about the anectdotal reports that lots of the new jobs were in the service sector and at the low end of that sector. Whether or not this month’s report presages real expansion or even presages the FOMC ‘s decision to raise rates, it’s still surprising that the market would be surprised by what we all know is coming.

Most of all, and the only thing that matters, this was not a very good week, especially if seeing some of the recent gains from energy and metal positions evaporate.

For the second consecutive week it was an example of how you just can’t anticipate or predict outcomes with any accuracy. What I thought had good chances for assignment turned out to fall by the wayside as the market’s selling accelerated as trading continued.

Fortunately, those positions that were in line to be assigned stayed close enough to their strikes to allow rollover of all of the call positions. 

The one assignment, and not the good kind, was the Gold Miners ETF puts, as gold plummeted today, as it and interest rates went in opposite directions after the morning’s Employment Situation Report.

Seeing how the GDX has been a recent trading standout, I don’t particularly mind taking ownership of shares as the one thing you know about every commodity is that their price cycles are a given. That makes them a little more reliable in serial trades despite their habit of taking large moves on a dime.

Some weeks, especially in January, it seemed that if not trading and re-trading GDX calls there would be nothing going on at all.

Besides being lucky enough to make all of those rollover trades, the other fortuitous thing this was the large number of dividends this week which some time soon will find their way back into the account.

As good as those may sound, they come nowhere close, however, to making up for an overall very bad week.

Starting next week off, just like this week, with less recycled cash than I had expected, it’s likely that the approach will be similar to this week and have caution as a primary characteristic. This week that caution was rewarded by virtue of simply not putting as much at risk and maybe even more caution would have been warranted.

With about 5 positions set to expire next week my focus will be to either see those be assigned or rolled over, possibly looking to bypass the following week, which is the end of the March 2015 option cycle.

Unless there will also be some technical factors in play as support levels on the S&P 500 are being approached, it’s not too likely that the fears about the timing of interest rates will carry through to next week, as there isn’t very much economic data being released that might confirm upward pressure on prices or wages.

Despite that, I’m not overly anxious to dip into the cash reserve as getting ready to begin the coming week.

Sometimes you just need some kind of proof or a sign that it’s safe to come out and play. Mostly that means continuing to get good economic news but not muddling their interpretation or acting as if the impacts of a strengthening dollar and increasing interest rates had never been considered before.

 

 

 

 

 

 

 

 

 

.

 

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

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



New Positions Opened:   BAC, CHK

Puts Closed in order to take profits:  none

Calls Rolled over, taking profits, into the next weekly cycle:  GDX, HAL, SNDK

Calls Rolled over, taking profits, into extended weekly cycle:  GPS (4/10)

Calls Rolled over, taking profits, into the monthly cycle: MRO

Calls Rolled Over, taking profits, into a future monthly cycle:  none

Calls Rolled Up, taking net profits into same cycle:  none

New STO:  none

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned: UAL

Calls Expired:  none

Puts Assigned:  GDX

Stock positions Closed to take profits:  none

Stock positions Closed to take losses: none

Calls Closed to Take Profits: none

Ex-dividend Positions: HAL (3/2 $0.19), JOY (3/2 $0.20), MOS (3/3 $0.25), BAC (3/4 $0.05), COH (3/4 $0.34), HFC (3/6 $0.32)

Ex-dividend Positions Next Week: NEM (3/10 $0.02), GME (3/13 $0.36)

 

 

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, AZN, CHK, CLF, COH, FAST, FCX, GDX, HAL, HFC, .INTC, JCP, JOY, LVS, MAT, MCP, MOS,  NEM, RIG, SBGI, WFM, WLT (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.



Posted on

Week in Review – February 23 – 27, 2015

 

 

Option to Profit Week in
Review –  February 23 – 27,  2015
 
NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED
5 / 5 0 5 1  /  0 1  / 0 1

    

Weekly Up to Date Performance

February 23 – 27,   2015

Finally, a week with almost a little of everything.

The last few weeks have been good ones for a more varied trading experience.

New positions beat the unadjusted S&P 500 by 2.1% and the adjusted index by 2.2% for the week. That unusually large beat was due to a combination of rollovers, dividends and
decent performance of the shares themselves, despite a late day sell-off in UAL, as compared to the overall market, which was essentially unchanged for the week.

The market was up only 0.3% for the week, closing on a mildly negative note, having been unchanged over the previous 4 days. By contrast, new positions were 1.8% higher for the week.

With only 1 assigned positions this week the positions closed in 2015 are an average of 5.4% higher, while the comparable time adjusted S&P 500 average performance has been 2.5% higher. That 2.9% difference represents a 116.5% performance differential.

 

Other than a brief catalyst from Janet Yellen, this was an exceedingly boring week as far as market news and market reactions.

Even retailer earnings reports and the GDP release did nothing to move markets in either direction as there was almost a complete embargo on anything really newsworthy.

While that brings volatility lower it was still a good week, especially if there was some exposure to those positions that remain volatile.

While stocks have given up the volatility over the past few weeks after having started the first month of the year having a triple digit move or 200 point swing each and every day, the past month has been much less exciting, at least in most stocks.

Meanwhile precious metals and interest rates have been all over the place and if you were among those that established a position in the Gold Miners ETF, either as a covered call or a put sale, you know exactly how volatile that position has been, although it has essentially gone nowhere, but has offered lots of trading opportunities in the underlying option contracts.

Add to that volatility in the energy sector, both on a daily basis and on an intra-day basis.

Just as the energy sector was punishing on the way down, it can be rewarding on the way up. The difference is that the way down was very sudden and came as a complete surprise to nearly everyone. By the time it happened it still took option premiums a long time to catch up.

Lately, however, as energy prices have been stabilizing and in the eyes of many teetering between going higher or just taking a rest before their next plunge, those option premiums have been reflecting that uncertainty and at least offering a little bit of reward in exchange for taking some risk.

There also has to be some uncertainty about what the next week or weeks will bring to stocks.

Whatever hope I had for retailers providing some optimistic earnings and future guidance, that really didn’t materialize this week and to make matters worse the previous quarter’s GDP was revised fairly significantly downward.

To date, that means that whatever extra money people are seeing in their pockets still isn’t showing up in the bottom line or in anyone’s projections for their future bottom lines.

With the important part of earnings season now over you have to wonder what will be the next catalyst higher, as we’ve again become used to seeing new daily highs.

While there turned out to be no catalyst this week it did turn out to be a good week to add some new positions, especially as there were chances to generate some additional revenue with rollovers and a decent number of positions going ex-dividend.

Next week, whatever it may bring, will at least bring an even larger number of ex-dividend positions. At the very least ge
tting those dividends gives the appearance of getting something while you wait for something to happen.

With only a single assignment for the week and the proceeds of the early closure of Western Refining going back into Halliburton, my cash pile won’t be as big as I thought it might be just a day earlier. With a decent number of positions expiring next week and all currently in the range for either rollover or assignment any new purchases will probably look at both weekly expiration dates and the following week, where there are currently no expiring positions.

However, with volatility again so low, there’s little desire to look too far ahead, especially since everything can change in just a day’s worth of trading, especially if some external or international events decide to finally have some influence on our shores.

 

 

 

 

.

 

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

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



New Positions Opened:   HAL, MRO,  LXK, SNDK, UAL

Puts Closed in order to take profits:  none

Calls Rolled over, taking profits, into the next weekly cycle:  GDX, GDX (puts), MRO, SNDK, UAL

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:  none

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned: AXP

Calls Expired:  LVS

Puts Assigned:  none

Stock positions Closed to take profits:  WNR

Stock positions Closed to take losses: none

Calls Closed to Take Profits: none

Ex-dividend Positions: SBGI (2/25 $0.16), LXK (2/26 $0.36), SNDK (2/26 $0.30), ANF (2/27 $0.20)

Ex-dividend Positions Next Week: HAL (3/2 $0.18), JOY (3/2 $0.20), MOS (3/3 $0.25), COH (3/4 $0.34), BAC (3/4 $0.05), HFC (3/6 $0.32)

 

 

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, AZN, CHK, CLF, COH, FAST, FCX, HAL, HFC, .INTC, JCP, JOY, LVS, MAT, MCP, MOS,  NEM, RIG, SBGI, WFM, WLT (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.



Posted on

Week in Review – February 16 – 20, 2015

 

 

Option to Profit Week in
Review –  February 16 – 20,  2015
 
NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED
3 / 3 1 2 6  /  0 2  / 0 0

    

Weekly Up to Date Performance

February 16 – 20,   2015

Finally, a week with a little of everything.

Although I said exactly that last week, too.

New positions beat both the adjusted and  the unadjusted S&P 500 by 2.2% for the week.

Heading into Friday the market was up only 0.1% for the shortened week, but Friday’s strong showing, especially after a dismal start, turned the market toward record levels in both the DJIA and S&P 500, in addition to other indexes.

With 7 assigned positions this week the total number for 2015 is still lagging comparable periods of earlier years, but is finally growing. Thus far the positions closed in 2015 are an average of 5.5% higher, while the comparable time adjusted S&P 500 average performance has been only 2.6% higher. That 2.9% difference represents a 110.3% performance differential that is very unlikely to be maintained through the year, particularly as the average holding period decreases.< /strong>

 

Despite almost nothing actually going on this week, as the market was virtually unchanged for the first 3 days of trading of this 4 day trading week, it was another good week.

It was nice to string another one to last week’s nice week, as February 2015 has been in complete contra-distinction to January, although comparatively speaking, January 2015 was better than the broad market had performed.

Still, while it is nice to out-perform, it only really matters, in the long run, if that out-performance means that you have more money after sitting down and counting your marbles, beans or whatever you play with.

It has been a while since having so many positions assigned at once and it was good being able to replenish the cash pile.

I always like to run a “what if” when a position gets assigned, That assumes that I would have been smart enough to have sold the assigned position at its price to end the week and then I compare that potential net profit to the net profit of selling at the strike price chosen and adding in the option premiums.

Sometimes, as in this week’s UAL purchase, it would have been better not having sold the options, sometimes it’s a close call, but more often it is a winning situation.

Even then, there are certain positions that I want to immediately buy back, such as GM or TMUS, but put that sort of emotional feeling aside to wait for a better opportunity, that may or may not come in the near future.

With this week’s assignments I have more cash than in a while, but would actually still like to have that pile grow some more.

But, I don’t think that I’ll let that get in the way of putting some of that money back to work as the new monthly cycle gets ready to begin.

With a few positions already set to expire next week and volatility falling, there is suddenly less appeal to looking for extended weekly options, as the premiums are getting less and less attractive as you add more and more time to the contract.

At the moment those positions expiring next week are all in the ballpark for either rollovers or assignments and either of those would be fine, but the more likely assignment of those positions appear to be, the more likely I’d be willing to dip into the cash reserve with the expectation that it was simply being recycled.

With almost nothing now set to expire in the middle of the month and a fair number set to expire at the end of the March 2015 cycle, I will probably focus on a week at a time and continuing to try and recycle whatever resides in the cash pile, as best as possible.

Next week has FOMC Chairman Yellen testifying to Congress, so there may be some ups and downs, especially as the bond market has been more volatile of late and large moves in that area can have some profound effects on equities, as well.

I won’t worry about that too much, as the more you try and apply some logic or thougthful rigor to understanding the market’s dynamic the more you realize that it’s worthless using rational thought processes to try and understand anything that is irrational.

In case you haven’t realized it, for all of the dependence on data, the market is extremely irrational, but you learn to deal with it, just as you learn to deal with a 2 year old.

 

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

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



New Positions Opened:   AXP, UAL, WNR

Puts Closed in order to take profits:  none

Calls Rolled over, taking profits, into the next weekly cycle:  GDX, GDX (puts)

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:  EMC (3/20)

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned: DOW, GM, LXK, MET, UAL, TMUS

Calls Expired:  AZN, FAST

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: MAT (2/17 $0.38), AZN (2/18 $1.88), RIG (2/18 $0.75), WNR (2/18 $0.30)

Ex-dividend Positions Next Week: SBGI (2/25 $0.16), ANF (2/27 $0.20)

 

 

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, AZN, CHK, CLF, COH, FAST, FCX, HAL, HFC, .INTC, JCP, JOY, LVS, MAT, MCP, MOS,  NEM, RIG, SBGI, WFM, WLT (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.



Posted on

Week in Review – February 9 – 13, 2015

 

 

Option to Profit Week in
Review –  February 9 – 13,  2015
 
NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED
2 / 3 3 3 3  /  0 0  / 0 0

    

Weekly Up to Date Performance

February 9 – 13,  2015

Finally, a week with a little of everything.

New positions trailed the unadjusted S&P 500 by 0.2% for the week and the adjusted index by 0.3%.

Despite being 1.8% higher for the week the covered positions placed a limit on their gains as the unadjusted S&P 500 finished 2.0% higher and the adjusted S&P 500 fi
nished 2.1% higher, as the S&P 500 set a new record close

Existing positions were 2.4% higher for the week, beating the broader market by 0.4% on the week, which has been the trend thus far in 2015. While it’s relatively easy to beat the broad market during a week when the market itself isn’t performing well, it’s especially nice to do so when the market has had a substantial gain.

With 3 assigned positions this week the total number for 2015 is still small as compared to previous year at the same point. Thus far the positions closed in 2015 are an average of 4.6% higher, while the comparable time adjusted S&P 500 average performance has been only 1.7% higher. That 2.9% difference represents a 164.6% performance differential that is very unlikely to be maintained through the year.

 

Most weeks, even when assets have climbed nicely I find something that I’m unhappy about.

Lately it has been related to the reduced trading activity and a dwindling cash reserve as assignments have been few and the income stream has been less than I would like to see.

This week I was pretty happy, although I would have liked to have been able to rollover Microsoft to also get its dividend next week, but that’s better than having one of those weeks sitting around and waiting for an opportunity and nothing ever gets to unfold.

The final bottom line for the week also helped to ease the dividend that got away, but the process was just better this week, as well.

This week was still a far cry from opening the number of new weekly positions as was the case through much of 2013 and 2014, but if anything is obvious, 2015 is not 2013 nor 2014.

What it may be is another 2011, as markets have been going up and down or a really regular basis and in having exerted so much energy since the beginning of the year is now back to where it ended 2014.

That represents a lot of effort for not having gone anywhere and that was precisely what 2011 was all about as the S&P 500 finished unchanged for the year, but not without lots of gyrations and large moves from day to day.

If 2015 will represent a return to that kind of a market instead of being one that simply goes higher in a straight line, then there will be far less opening of new positions and far more rollovers, instead.

The longer you’ve done this sort of thing the more those rollovers have their appeal and the more consistently those returns can accumulate even if the stock has ended up doing very little on a net basis, just as long as it puts in the effort in-between.

The rollover of the Gold Miners ETC (GDX) puts was an example of taking a position that was heading toward its end and trying to breathe additional life into it by rolling it over rather than seeing it leave the portfolio.

That’s what I had wanted to do with Microsoft and that’s the sort of thing that you can find yourself doing more and more, especially when the forward weeks premiums reflect more volatility than the expiring week’s premiums. In those cases the near week sees erosion of its premium at a faster rate than the forward week and it may make sense to do the rollover rather than take the assignment of a call or the expiration of a put.

That also hasn’t really been the case since 2011 and early 2012. It also wasn’t the case with Microsoft today.

There’s actually something nice about having an in the money position reward you with an enhanced premium and without the need for an event, such as earnings, to be necessary for that enhancement. When it does occur there’s reason to keep the position going and going.

It’s also nice to see that even if one of those in the money stocks falls it may not be as bad as it is for others. You may even find yourself rooting for a price drop to get it closer to the strike price so that you can get to play all over again.

Withh lots of positions set to expire next week and with some replenishment of the cash reserves I may be a little less miserly in adding new positions. However, with only a 4 day trading week and not really wanting to add to the number of positions set to expire on a single day, I’m likely to look beyond next week and into the March 2015 cycle when writing contracts.

That’s especially true as at the moment a number of next week’s positions are in decent position themselves to either be assigned or rolled over.

Either way, I’d be happy to see some more positions taken off the books or at least be fruitful members of the portfolio and take advantage of what I hope will continue being an up and down market

 

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

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



New Positions Opened:   ATVI, GDX (puts), MSFT

Puts Closed in order to take profits:  none

Calls Rolled over, taking profits, into the next weekly cycle:  GDX, GDX (puts)

Calls Rolled over, taking profits, into extended weekly cycle:  GPS (3/7)

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:  BP (3/20), DOW (3/20), LVS (2/27)

Put contracts expired: none (some may have chosen to let GDX put expire rather than to rollover)

Put contracts rolled over: GDX

Long term call contracts sold:  none

Calls Assigned: ATVI, MET, MSFT

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: BP (2/11 $0.60)

Ex-dividend Positions Next Week: MAT (2/17 $0.38), RIG (2/18 $0.75), AZN (2/18 $1.88)

 

 

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, CHK, CLF, COH, FCX, HAL, HFC, .INTC, JCP, JOY, LVS, MAT, MCP, MOS,  NEM, RIG, SBGI, WFM, WLT (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.



Posted on

Week in Review – February 2 – 6, 2015

 

 

Option to Profit Week in
Review –  February 2 – 6,  2015
 
NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED
0 / 0 1 3 1  /  0 1  / 0 0

    

Weekly Up to Date Performance

February 2 – 6, 2015

For only the second time in years, there were no new positions opened this week and hardly  any other trades, either.

For purposes of comparison, it’s probably a good thing that no new positions were opened this week, as it would have been a tall order being able to match the 3.0% advance for the S&P 500.

On a positive note existing
positions were able to keep up with that advance as they were also 3.0% higher for the week, which is generally unexpected in a week that the market itself was so strong.

There was only a single assigned position this week and thus far the positions closed in 2015 are 4.9% higher, while the comparable time adjusted S&P 500 performance was 1.4% higher. That 3.5% difference represents a 247.4% performance differential that is very unlikely to be maintained through the year.

 

Up until Friday’s close, this week was virtually a mirror image of last week.

If you ever believed that the image in the mirror looked better than the original, you would certainly believe that was the case this week.

While last week, and for the most part 2015, has been made a little more palatable by virtue of out-performing the S&P 500, it’s far better to have more money at the end of the week to show for your efforts than it is to have bragging rights.

While I enjoy making trades and am not particularly thrilled when sitting around doing nothing, the color green makes doing nothing acceptable as long as it can last and not devolve into shades of red.

This was only the second time in years that there were no new positions opened during the week. The previous time, though, was only 3 months ago.

Partially, the reason for not plunging in and picking up new positions was the size of cash reserves and a real desire to add to the pile, rather than deplete it.

But with the week opening on a strong note and then doing so for a second consecutive day, it’s hard to want to get in when the predominant move has already been higher. Additionally, with so few positions set to expire this Friday, the idea of making new purchases on Wednesday or after would have meant either very small premiums for a weekly contract or going into the next week and further reducing the chances of assignments this week that could be used to replenish the cash pile.

As it is, it was another disappointing week as far as assignments would go.

I had been hopeful that MetLife and The Gap would join Halliburton and get assigned, especially as The Gap and MetLife have sales and earnings, respectively next week, but they, along with most of the rest of the market decided to give up mid-Friday afternoon.

Given the strong trading during the week and the comeback on Thursday from a rally killing end to Wednesday’s trading even with a little disappointment from Friday’s close, you have to be impressed with the way the market has come back from its recent losses.

Again.

The problem is that it has kept doing that over and over again since reaching market highs at the very end of December.

While some may point to that as being reflective of the market’s strength there are others who see it as being similar to the spasms seen before something undesirable happens.

I don’t have too much of an opinion on what all of these ups and downs mean, as long as the net result is only a small change. A week 3% higher after a week nearly 3% lower, coming after a week nearly 2% higher isn’t so bad as long as all of those big moves offset one another and create a feeling of uncertainty.

That feeling gets reflected in the option market and that’s good if you’re the one doing the selling.

In general, it’s not as good if you’re the one doing the buying, as you may also see when trying to close some positions or do rollovers.

Hopefully that volatility continues next week and it would be great if the market could continue an upward bias in its tone, although it would esp[ecially be nice to see the back and forths happening from day to day rather than week to week.

With a couple of rollovers this week now set to expire next week and with already enough positions set to expire the fo
llowing week as the cycle comes to an end, my preference for any new purchases next week is to look for weekly expiration opportunities.

However, I think it may be another quiet week as far as new positions go, just as there’s absolutely no clue what the market is thinking as it alternates between bull and bear and once again approaches all time highs.

The real signals may come in about 2 weeks as the major retailers start to report earnings and provide guidance. With today’s Employment Situation Report there’s  reason to believe that retail earnings may finally provide some evidence that lower energy prices and increased employment at higher wages will give a needed boost to the economy.

If today’s surge in interest rates is any indication that’s exactly what is the prevailing thought among those who live and die by those projections.

If so, then it’s up to the stock market to decide whether good news should be treated as being good news.

 

 

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

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:  GME (3/20)

Calls Rolled Up, taking net profits into same cycle:  none

New STO:  BAC

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned: HAL

Calls Expired:  EMC

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: INTC (2/4 $0.24), MET (2/4 $0.35)

Ex-dividend Positions Next Week: BP (2/11 $0.60)

 

 

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, BP, CHK, CLF, COH, DOW, FCX, HAL, HFC, .INTC, JCP, JOY, LVS, MAT, MCP, MET, MOS,  NEM, RIG, SBGI, WFM, WLT (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.



Posted on

Week in Review – January 26 – 30, 2015

 

 

Option to Profit Week in
Review –  January 26 – 30,  2015
 
NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED
2 / 2 0 6 0  /  0 1  / 0 1

    

Weekly Up to Date Performance

January 26 – 30, 2015

After a respite from decidedly negative weeks last week, we were back to the 2015 new normal this week.

The two new positions opened this week, which were the same as opened the week before, badly trailed even a very weak market as technology and interest rate sensitive stocks were pariahs, even though that was pretty much the case for all sectors.

Those new positions ended the week 4.3% lower. Despite the overall market being 2.7% lower, they still trailed by 1.6% on both adjusted and unadjusted bases.

However, as was the case for all of the weeks in January except for last week in which the market rose, existing positions again outperformed the market by 1.4%, but were still 1.4% lower for the week.

That’s a small consolation, but is one of the things that you’re supposed to see. That is, in a down market, the losses aren’t as great, just as in an up market the gains may not be as great.

With one closed position for the week, thus far the positions closed in 2015 were 4.5% higher, while the comparable time adjusted S&P 500 performance was 1.9% higher. That 2.5% difference represents a 135.3% performance differential that is very unlikely to be maintained through the year and is skewed by having closed some longer term positions, such as LuLuLemon and Blackstone.

 

If you were among those waiting for the fabled “January Effect” that many of us were brought up on believing was sacrosanct, you can wait another year, as this January was like those of the recent past few years and did little to provide a sense of optimism going forward.

What this January did present was a glimpse of what volatility is like, especially if looking at market moves since hitting its highs at the very end of 2014.

Since that time we have had a quadruple bottom. There have been lots of days with gap up and gap down moves and lots of days with large intra-day reversals.

The preponderance of those moves has been to bring the market about 4% lower, despite the substantial trimming of losses late in the day on Friday.

Oh wait.

That substantial trimming of losses was itself reversed in the final hour of trading.

But that volatility isn’t being restricted to the stock market. Treasuries, precious metals and currencies are all bouncing around all over the place.

You can add oil into that mix, as well, as it was a strong move higher late in the day on Friday, for no yet known reason that took the market on its reverse course, as it had been propped up earlier in the day only through the performance of Visa in the DJIA, which is a uniquely weighted index such that a given percentage move in a high priced stock like VIsa has a greater impact on the index than an identical percentage move in something priced much lower, such as General Electric.

In fact, a 4% rise in shares of Visa would add about 65 points to the DJIA, while the same percentage move in GE would add only 6 points, despite GE having a market capitalization that is almost 70% greater than that of Visa.

Go figure.

But as bad as the DJIA looked today, it would have been much worse without Visa today, but even with its help the DJIA lagged the S&P 500 as the latter is more heavily weighted by energy stocks, which did well in the final 90 minutes of trading.

Just not well enough.

This was a week that I was optimistic enough to think that all of the positions set to expire on Friday had a chance of being assigned.

How quickly that changed.

Luckily, there were opportunities to get some rollovers done and to close out the Blackstone position, as there was little to be gained by hanging around for its earnings report and waiting another 3 weeks for expiration.

On the positive side closing out the Blackstone position added some money to cash reserves, but on the negative side, that was it for the week.

With cash reserves very low I don’t anticipate much in the way of opening new positions next week, although lately there haven’t been many more than two or three new positions, anyway.

With some positions set to expire next week, if any new positions are opened they will be done trying to gauge the likelihood of seeing those existing positions get assigned. If they look as if they could get assigned then I would probably try to open new positions and sell expanded weekly options on them, expiring February 13, rather than next Friday.

However, if those positions look out of reach I would likely consider selling weekly contracts on any new positions.

Again, as last week, I’d love to be able to sell some new call contracts on existing positions but hope that I have better luck with that this coming week than was the case this past week.

Hopefully, with the psychological performance pressure of January now a thing of the past, February will be able to get on with just being a normal month, but it would be great to see this volatility continue, as long as the net result wasn’t the same as in January.

 

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

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



New Positions Opened:   INTC, MET

Puts Closed in order to take profits:  none

Calls Rolled over, taking profits, into the next weekly cycle:  GDX ($20), GPS, HAL

Calls Rolled over, taking profits, into extended weekly cycle:  GDX ($20)

Calls Rolled over, taking profits, into the monthly cycle: MET

Calls Rolled Over, taking profits, into a future monthly cycle:  GDX (March 2015, $22.50)

Calls Rolled Up, taking net profits into same cycle:  none

New STO:  none

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned: none

Calls Expired:  INTC, MET

Puts Assigned:  none

Stock positions Closed to take profits:  BX

Stock positions Closed to take losses: none

Calls Closed to Take Profits: none

Ex-dividend Positions: FAST (1/28 $0.28)

Ex-dividend Positions Next Week: INTC (2/4 $0.22), MET (2/4 $0.35)

 

 

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, BAC, BP, CHK, CLF, COH, DOW, FCX, HAL, HFC, .INTC, JCP, JOY, LVS, MAT, MCP, MOS,  NEM, RIG, SBGI, WFM, WLT (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.



Posted on

Week in Review – January 19 – 23, 2015

 

 

Option to Profit Week in
Review –  January 19 – 23,  2015
 
NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED
3 / 3 2 3 2  /  0 1  / 0 0

    

Weekly Up to Date Performance

January 19 – 23, 2015

After a fairly miserable beginning to 2015 we were due for something good sooner or later.

With 3 new positions added this week, all within about the first hour of the week’s opening bell, those positions ended the week 1.4% higher. However, that wasn’t enough to beat the S&P 500 which was 1.6% higher for the week on both adjusted and unadjusted bases.

After 3 successive down weeks, yet existing positions nicely outperforming the market, this week there was some catch up, as existing positions were still 1.2% higher, but trailed the market’s performance by 0.4%, as can usually be expected when markets are strongly higher.

Two of the new positions for the week were assigned with closed positions for 2015  3.8% higher, as compared to the 2.2% advance for the time adjusted market, representing a 76.2% difference

 

While the big news for the week was the ECB finally embracing Quantitative Easing, despite the likelihood that their doing so won’t have any positive impact on the US markets, we acted as if it would, at least for a very short period of time.

I’m not complaining, as I like anything that sends portfolio values higher, but the lack of follow through to end the week, especially a week that was generally positive even before the announcement, was a little disappointing.

However, on a positive note, we’re far better off depending on ourselves for markets to advance as opposed to depending on the ECB.

Instead of being the unlikely beneficiaries of ECB injection of liquidity into their bond markets, which could scarcely drive their interest rates any lower, we are likely to begin seeing some tangible benefit of lower energy costs sooner or later and hopefully those will serve as the driver of higher stock prices to come.

Up until the final hour it looked as if all three new positions for the week would get assigned, but the interest rate sensitive MetLife succumbed to the large drop in interest rates later in the session.

While I was happy you see 2 positions get assigned, I would have been happier for all three, but would have welcomed back the chance to repurchase MetLife, and maybe even Intel or Best Buy, if they open the following week lower.

This was actually a very interesting week as the first 3 days of trading saw significant turnarounds from the pre-opening futures trading within about 30 to 60 minutes of trading and then turnarounds from the turnarounds.

As with most weeks I’m always disappointed by the number of new STO trades that are made on existing uncovered positions. While I would love to do more DOH trades, despite the greater attention they need in order to avoid assignment, the volatility, despite some transient increases, has still been too low to offer a risk – reward proposition that’s worth taking looking at.

As it is, I’m happy that there were some opportunities to rollover some positions and make some of those new call sales, but just like this week, next week doesn’t have very many positions set to expire on Friday.

That means that I’ll likely be looking for new positions next week with weekly option expirations, as it will be another week that I wouldn’t mind adding some new positions, even though I’d like to see cash reserves beefed up a bit more.

Next week will be the busiest week for S&P 500 company earnings and despite the fairly weak earnings so far, I think there may be some hints of good news to come as we start hearing from more consumer names and more from companies that stand to benefit from lower energy costs.

That includes some large oil companies that also begin reporting next week. If they’re able to deliver some news, as did Schlumberger and Halliburton, that wasn’t as bad as expected, that could help create some confidence going forward.

Hopefully that will be the case and I would certainly like to see another week like this one, even if it may end on a sour note.

In addition to earnings next week, while the overall week is a quiet one for economic news, it will feature both an FOMC Statement release and GDP statistics two days later.

With interest rates having been so volatile the past two weeks, both of those events net week could add to that volatility and make the week more interesting.

Not that I really yearn for things to be more interesting. Lately they’ve been interesting enough.

 

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

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



New Positions Opened:   BBY, INTC, MET

Puts Closed in order to take profits:  none

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

Calls Rolled over, taking profits, into extended weekly cycle:  EMC (2/6), MET (2/6)

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:  AZN (2/20), SBGI (3/20)

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned: BBY, INTC

Calls Expired:  BAC

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: none

Ex-dividend Positions Next Week: FAST (1/28 $0.28)

 

 

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, BAC, BP, CHK, CLF, COH, DOW, FCX, HAL, HFC, .JCP, JOY, LVS, MAT, MCP, MOS,  NEM, RIG, SBGI, WFM, WLT (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.



Posted on

Week in Review – January 12 – 16, 2014

 

 

Option to Profit Week in
Review –  January 12 – 16,  2015
 
NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED
1 / 1 0 4 2  /  0 3  / 0 0

    

Weekly Up to Date Performance

January 12 – 16, 2015

This was a fascinating week.

Only one new position was added this week and it ended the week 3.6% higher, beating the unadjusted S&P 500 by an unusually large 4.8% and the unadjusted S&P 500 by 3.8%, as the market finally moved higher on Friday, after 4 very bad days of trading and very discouraging  counter movements when occasional rally attempts were underway.

The market itself lost 1.2% on an unadjusted basis and 0.2% an unadjusted basis, adding to a recent collection of bad weeks for markets.

Just as with last week, the large discrepancy between adjusted and unadjusted S&P 500 performance is because no trades were initiated on the Mondays of those two weeks, each of which had very large downward moves. The adjusted relative performance, therefore, only measures relative performance for that period of time that money is put at risk.

However, another relative performance advantage was again seen in the existing positions, this week as they finished the week % lower, but still surpassed the S&P 500 for the week by %, again, with no real stand-outs to account for that out-performance.

Two positions were closed this week, despite another week of poor market action. So far, based on only 3 closed positions for 2015, as opposed to more than 200 for each of the past two years, those positions were 4.7% higher, as compared to the 2.4% advance for the time adjusted market. That represents a 99.1% difference and includes the long suffering shares of LiuLuLemon that were finally assigned after more than a year of holding and somehow actually managed to out-perform the S&P 500 for the period of its holding.

 

Well, this was yet another interesting week, for sure. That has now made for three of those in a row and all three have been very different, even though the end results have roughly been the same; all dragging the market lower.

At some point there may be a theme in the making. Depending on your perspective that theme in the making is either one to be nervous about or one that offers opportunities.

While I’m not necessarily nervous about all of the widespread uncertainty, I was very happy to have some positions assigned this week and would have been much happier had more gotten assigned.

It was the slowest trading week for a long time with only one new position added. Fortunately, despite the really bad trading action, there was some opportunity to get some rollovers done, but having sold some calls on uncovered positions would have been a nice touch.

To some degree, it was gratifying to again out-perform the broader market, although it’s much more meaningful if that out-performance happens to end you up with more money than less. As least this week did the former, again, in a surprisingly strong way, just like last week, although there’s not too much doubt that Friday’s close was a key factor.

What made this week especially interesting was that everything went haywire all at once.

Interest rates, currencies, stocks, precious metals and oil were all incredibly volatile.

There wasn’t anything really resembling good news this week other than the three consecutive days of oil closing higher during the final hour of trading.

The fact that oil went down so sharply and so precipitously led many to believe that the decline was fueled by speculators. If that’s the case, the climb higher may also hold some surprises.

With a 3 day weekend ahead, lots can happen in international markets to test that theory by the time we’re able to get back into the game on Tuesday morning, but what is clear is that for the past week and a half, the stock market and oil have re-coupled, after a very short time of having gone their own ways.

Whether that’s good or bad depends on your view, but if you hold lots of energy positions and are long the market, the coupling is good if the slide was artificially induced to some degree.

Friday’s final hour close was great, but most people are wary of really large climbs higher, believing that they only serve to mask bearish trends. There’s no doubt that we’ve seen a flurry of those large moves higher, but there’s also no doubt that they’ve come amidst a number of large moves lower.

So far, even with today’s unexpectedly large gain, the recent net result of all of those large moves has still been to the downside, as the S&P 500 is still almost 4% below its very recent high just a few weeks ago and we’re now in the unusual position of having witnessed a triple bottom.

It was unusual enough to have seen a double bottom, especially since for almost the past 3 years we’ve seen great regularity in the size of the declines and their spacing.

Every two months has been the formula, not every two weeks.

So does that make me nervous?

No, it makes me think that there will maybe be the chance of having some sustained volatility and we haven’t seen that since the beginning of 2012.

What also made this week interesting was a mention of good and bad volatility by bankers, who were moaning about their fixed income and currency trading losses.

The good volatility is the kind that sees lots of volleying back and forth. It’s even better if it’s on an intra-day basis. The bad kind is when you see sustained moves higher and lower.

If all of this uncertainty brings a game of volleyball back to the market, I would replace nervousness with happiness and would be very happy to be playing that game.

 

 

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

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



New Positions Opened:   FAST

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:  GDX (1/30), HAL (1/30)

Calls Rolled over, taking profits, into the monthly cycle: GME, DOW

Calls Rolled Over, taking profits, into a future monthly cycle:  none

Calls Rolled Up, taking net profits into same cycle:  none

New STO:  none

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned: DNKN, LULU

Calls Expired:  AZN, MAT, SBGI

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: CHK (1/13 $0.09), FCX (1/12 $0.31), WFM (1/14 $0.14)

Ex-dividend Positions Next Week:  none

 

 

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, AZN, BP, CHK, CLF, COH, DOW, FCX, HAL, HFC, .JCP, JOY, LVS, MAT, MCP, MOS,  NEM, RIG, SBGI, WFM, WLT (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.