Option to Profit Week in Review
May 19 – 23,  2014
 
NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED
4 / 4 9 6 6  / 0 2  / 0 0

    

Weekly Up to Date Performance

May 19 – 23, 2014 

New purchases for the week trailed the S&P 500 for the week that saw a 1.2% gain, while  those new purchases matched the performance of the time adjusted S&P 500, which were both 1.0% higher for the week.

The market finished higher for the first time in 3 weeks and did so with a bit of confidence as it even moved nicely higher prior to the FOMC report and then lost none of the steam it had built up after a large loss the prior day.

Performance of positions closed in 2014 continue to out-perform the S&P 500 performance by 1.6%. They were up 3.3% out-performing the market by 101.5%.

This week was a little more like it after a couple of weeks of very little trading and dashed expectations as the market reversed course, and not in a good way for the latter parts of the past couple of weeks.

The combination of very few assignments and very few rollovers, especially like last week is one that I don’t particularly like to see, but it appears as if the decision to defer rollovers in the hope that this week would be somewhat better did work out. It’s just not the kind of decision I want to be in a position to make more than once or twice every five years.

This time around the week reversed course in the good kind of way.

WIth all of the concerns we had this time last week it was another week of talking about new records as the week came to a close. Unlike some previous weeks we didn’t see a collapse in the latter part of the week and instead saw unexpected strength, despite the lack of any catalyst.

As a result this week you could count those chickens before they were hatched and not end up overly disappointed.

This week had a nice combination of assignments, rollovers, newly covered positions and new purchases. It seems as if it has been a while since those all came together. I was especially happy to find some new cover and get some laggards to start earning their keep.

As a result of that combination of assignments and rollovers the cash reserve is restored somewhat and available for new purchases. With only 5 positions set to expire next week and with volatility so low the greatest likelihood is that next week’s new purchases will look at a preponderance of weekly option contracts, rather than expanded weekly contracts. However, with the coming week being a shortened one due to the Memorial Day holiday, I may look at some expanded option poossibilities, if only to make up a little for the lost day of premium for the coming week.

With another new record high set to end the week despite having money to burn, you still have to be mindful of how precarious it can be at the top and how far that fall can be. Most everything is a balance between consideration of risk and reward. However, as we climb so hgh it seems reasonable to believe that the continued upside reward is decreasing relative to the downside risk.

For that reason, although the money is there and there are now six fewer positions to stock the portfolio, I’m not terribly interested in replacing all six during the coming week. With so many rollovers and newly covered positions some of the upcoming week’s income has already been realized and that removes some of the need to find new sources of revenue.

Of course, as with every week, the plan may be great, but it can all change with the first opening bell of the week.

WIth the portfolio having lost some positions I wouldn’t mind a little bit of a decline to start the week on Tuesday and the potential opportunity to repurchase some of the recently assigned positions.

The longer you do this the less boring it gets to keep doing the same thing over and over again.

Have a safe and fun Memorial Day.

 

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:  HFC, IP, KSS, UA

Puts Closed in order to take profits:  none

Calls Rolled over, taking profits, into the next weekly cycle:  EBAY, LOW, MET, PFE

Calls Rolled over, taking profits, into extended weekly cycle:  EBAY (6/6), HFC (6/13)

CallsRolled 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:  CY, EBAY, FAST, GM, LLY, MET, RIG, SBUX, TXN

Put contracts sold and still open: none

Put contracts expired: none

Put contract rolled over: none

Long term call contracts sold:  none

Calls Assigned:   CMCSA, IP, MA, SBUX, TXN, UA

Calls Expired:   GM, JPM

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:  TGT (5/19 $0.43), CLF (5/21 $0.15), IP (5/21 $0.35)

Ex-dividend Positions Next Week:  RIG (5/28 $0.75), HFC special dividend (5/28 $0.50)

 

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, BMY, BX, C, CLF, COH, CY, DRI, FCX, FDO, GM, JCP, LULU, MCP, 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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Copyright 2014 TheAcsMan