Option to Profit Week in Review
May 12 – 16,  2014
 
NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED
2 / 2 2 1 2  / 0 11  / 0 0

    

Weekly Up to Date Performance

May 12 – 16, 2014   

There were only two new purchases for the week and they beat the time adjusted S&P 500 by 0.6% and also surpassed the unadjusted S&P 500 index by a smaller 0.1% during a week that ended much better in the final two hours than the previous two days would have suggested to be the case..

The market broke its pattern of 10 straight weeks of alternating weekly gains and losses and posted a second consecutive losing week with an unadjusted  loss this week of 0.1% and with an adjusted loss  0.5%. The two new positions gained 0.1% during the time period.

Existing positions also showed a 0.1% advantage over the market, eking out a small gain.

With only two assignments for the week the performance of positions closed in 2014 didn’t change much as they continued to exceed the S&P 500 performance by 1.7%. They were up 3.3% out-performing the market by 102%.

Another discouraging week for the markets as it put together two really bad days on top of getting the week started on a really sour note. Ordinarily a strong up day to start the week after you’ve rolled up a number of positions the previous week is something that I like to see, especially if not really keen on spending new money. to spend. But this week the early strength just wasn’t very convincing and couldn’t lure me into much new buying. I wasn’t literally or figuratively buying the mood of that first day and I couldn’t really get very comfortable with spending much to create new positions.

In hindsight that may have been fortuitous because for the rest of the market was marked not only by losers but by the magnitude of the losses.

On a positive note the market didn’t completely fall apart on Friday, which could easily have been the case on a monthly option ending day.

Having gone through about 5 years of trading this was my slowest week during that entire time. Not only with the number of new purchases, but also with the combined number of rollovers, new covered positions and assignments.

It was also only the second or third time that I believed that it was warranted to let contracts expire rather than rolling them over. That was due to the relatively high costs associated with rollovers and the belief that some kind of  a bounce is likely to occur after what was a fairly unprovoked drop this week.

Given how low the premiums would be to sell entry level strikes after having to buy back existing contracts, there was very little excitement about doing so.

If there’s any positive spin to be had at all, it’s regarding the final two hours of trading that brought the market to a respectable close and didn’t allow it to take the easy way out. During that final recovery I made almost as many trades as for the entire week, with two new covers established and one unexpected assignment. Of course, just a few days earlier I had already been counting all of the assignments and rollovers I thought were sure to come.

What all of this means for next week is that there is less new new money to replenish cash reserves, although not much was spent this week, either. However, the real focus has to be on selling new call options and first creating another weekly income stream before thinking too much about the possibility of capitalizing on what may be relative bargain prices.

That can be hard to do as some of the prices do look really appealing.

Ultimately, I’m glad this week is over and I’m happy to have escaped reasonably intact. after it was all said and done it was as if this week didn’t even happen. I suppose that’s better than one of the two alternatives.

 

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:  CMCSA, LLY

Puts Closed in order to take profits:  none

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

Calls Rolled over, taking profits, into extended weekly cycle:  none

CallsRolled over, taking profits, into the monthly cycle:  none

Calls Rolled Over, taking profits, into a future monthly cycle: MET

Calls Rolled Up, taking net profits into same cyclenone

New STO:  FCX, FDO, GM, LOW

Put contracts sold and still open: none

Put contracts expired: none

Put contract rolled over: none

Long term call contracts sold:  none

Calls Assigned:   SBUX, STX

Calls Expired:   BMY, CY, FAST, FCX, FDO, GM, LLY, MET, RIG, SBUX, TXN

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:  LLY (5/13 $0.49), STX (5/12 $0.43)

Ex-dividend Positions Next Week:  TGT (5/19 $0.43), CLF (5/21 $0.15), IP (5/21 $0.35)

 

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, BMY, BX, C, CLF, COH, CY, DRI, FAST, FCX, FDO, GM, JCPLLY, LOW, LULU, MCP, MET, MOS,  NEM, PBR, RIG, SBUX, TGT, TXN, 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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Copyright 2014 TheAcsMan