Option to Profit Week in Review
April 7 – 11, 2014
 
NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED
7 / 7 5 8 0  / 0 7   / 0 0

    

Weekly Up to Date Performance

April 7 – 11, 2014

New purchases beat the time adjusted S&P 500 this week by 2.1% and the unadjusted S&P 500 index by 2.3% during a week that saw the highs and the lows of trading behavior.

The beat of the index was the largest that I can recall, but as always that kind of thing , especially to that magnitude, will only occur during significant market weakness.

The market showed a large adjusted loss for the week of 2.5% and an even larger 2.7% unadjusted loss for the week, while new positions lost 0.4%.

It’s like standing next to a much uglier group of people. You always do well in the comparisons.  

Existing positions out-performed the market by 0.4% for the week after unusually large beats in each of the two previous weeks, which was predominantly due to the ability to keep rolling over and selling new cover for uncovered positions. 

Since this week was an unusual one in which no positions were assigned, thank you Thursday and Friday, for positions closed in 2014 the performance is the same as last week.  

Performance exceeded that of the S&P 500 by 1.6%. They were up 3.6% out-performing the market by 90.9%.

What a week.

While there’s never a shortage of reasons to explain what is going on it’s amazing how one day’s truth becomes the next day’s fallacy.

This week in less than 24 hours, in fact, in about just 20 hours we went from the joy of believing that low interest rates were to be upon us for the foreseeable future to fretting about rising interest rates.

Or at least that’s the best interpretation that anyone could put on the 450 point turnaround from Wednesday to Thursday’s closing bell and that continued to be the story that most people were sticking with as another 140 points were dropped to end the week.

This was a good week to learn the old adage of not counting your chickens until they’re hatched, but it was also another good week to be hedged and to wonder if anyone really knows what’s going on around them.

Barely 48 hours ago it looked as if there would be loads of assignme
nts and what wouldn’t be assigned would simply be rolled over.

How did that work out?

While I felt fortunate last week to have gotten all of those assignments and rollovers, as the market finished the week on a very strained note, this week evened things out, at least as far as assignments go. Fortunately, there was some opportunity to get a limited number of rollovers completed.

What that likely means for next week is that even with what appear to be more bargains than we’ve seen in a while, I won’t be aggressively seeking them out. I’m going to be much more interested in finding any opportunity to sell calls on existing uncovrered positions, especially since this week added a number to that list after a few weeks of reducing their numbers and put those stocks to work.

While I would have liked to have rolled over more positions as the market disappointed my hopes for a bounce higher today, sometimes there is a limit to what you believe is an acceptable reward.

Today it was difficult to find those rewards and I found myself preferring to wait until the next to see whether things get any better.

What had me a little optimistic enough to defer some rollovers was that the mid-afternoon concerns that there might be a “geo-political” event over the weekend did not drive stocks lower and news that there was a large sell order imbalance at the close also didn’t drive shares lower, either.

Those both could have easily sent the markets into a sustained sell-off, but that never happened. That has to give some reason to think that there may be a better day ahead.

The technicians on the other hand will point to the NASDAQ closing a hair below the 4000 level, which they view as portending more selling.

Still, when the market goes down is when you often most readily see the benefits of being wary, as both new positions and existing positions significantly out-performed the market, despite the fact that shares were also further lowered due to the fairly large number of ex-dividend positions this week.

At least that money will come back to the account.

Hopefully next week will see more come back into the account on paper, as shares bounce back, but more importantly some real cash hits the accounts as contracts are sold.

With markets now down about 4.5% from their highs we’re simply back to having the same discussion as about a month ago. Since then we just fell back into the same patter and exceeded the old highs.

At some point even well worn patterns find their exceptions, but there’s certainly nothing fundamentally deteriorating around us that should give cause and reason for the market to suddenly change its fundamental behavior, especially since by the mist basic of measures it isn’t expensive. 

While I started this week looking
forward to having a week much like the previous one, i can’t say the same for next week. While I look forward to it, I do so in the hope that the relative out-performance continues, but at least is accompanied by some absolute gains, as well.

It’s easy to get used to those and I don’t know about you, but I need my fix.

 

  

     

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:  CHK, CMCSA, COH, CY, LOW, MET, SBUX

Puts Closed in order to take profits:  none

Calls Rolled over, taking profits, into the next weekly cycle:  AIG, BMY, COH, SBUX

Calls Rolled over, taking profits, into extended weekly cycle:  C (4/25), GM (5/2), GPS (4/25), VZ (4/25)

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:  EBAY, FDO, LULU, MA, PM

Put contracts sold and still open: none

Put contracts expired: none

Put contract rolled over: none< /span>

Long term call contracts sold:  none

Calls Assigned:  

Calls Expired:   BMY, CMCSA, HFC, LOW, MET, MOS, TGT

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 (4/10 $0.09), GPS (4/7 $0.22), MA (4/7 $0.11), VZ (4/8 $0.53), DRI (4/8 $0.55), FCX (4/11 $0.31), WFM (4/9 $0.12)

Ex-dividend Positions Next Week:  none

 

 

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, BMY, C, CLF, CMCSA, FCX, GM,  HFC, IP, JCP, LOW, MCP,  MET, MOS,  NEM, PBR, RIG, TGT, WFM, WLT, 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.



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