Option to Profit Week in Review
June 9 – 13,  2014
 
NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED
4 / 4 1 6 0  / 0 3  / 0 0

    

Weekly Up to Date Performance

June 9 – 13, 2014 

New purchases for the week beat the unadjusted S&P 500 by 2.2% and surpassed the adjusted index by 2.1%

The market finished lower for the first time in the past four weeks and that’s usually an invitation to out-perform.

New positions were 1.5% higher while the overall market was down 0.7% on an unadjusted basis. 

Existing positions out-performed the S&P 500 by 0.9% for the week.

Since there were no assignments this week, performance of positions closed in 2014 continue to out-perform the S&P 500 performance by 1.5%. They were up 3.3% out-performing the market by 89.6%. 

I’m not really certain how to characterize this week.

Ultimately, it’s always about the bottom line and the bottom line was better this week than last wek, but there’s also the path taken that has to be considered.

This week just didn’t have very much in terms of activity to get from Point A to Point B so to a large degree it’s a question of just being taken along for the market’s ride, which closed surprisingly strongly, given the real geo-political uncertainty that may accelearate over this weekend.

During the week there wasn’t the kind of opportunity to get new cover, as I had hoped, as we saw two consecutive triple digit losses for the week and no really strong days. All in all, it was a mediocre week, which itself wasn’t much of a surprise, since there was really little economic news delivered.

That may be different next week as we have both an FOMC release and a Chairman’s press conference, both coming just days before the monthly expiration.

For me, that’s always a reason for concern. At the moment it appears as if a fair number of positions are in line to be assigned or rolled over, but that can change with just an errant word or two.

Given that there were no assignments this week that immediately makes me less likely to eagerly spend down cash reserves in the coming week, particularly as tensions are increasing in Iraq.

So what was good about this week? The process wasn’t very good, but the outcome was acceptible.

It did get us one week closer to the monthly expiration and leaving only one more week for breath holding.

New purchases fared well as did existing purchases and of course, there were more dividend inflows.

With existing positions doing well and with a number currently being in the money that also means being in a better position to withstand market weakness, although it also means potentially benefitting less in the event of market strentgh next week.

From those persectives I might be happy as far as the way the week transpired, but I would have liked much more trading activity. In hindsight that’s always easy to say, especially those weeks when the new psotiions fare well, as they did this week.

On another positive note, although a very tiny one, volatility did creep up just a little but, but not really to the point that anyone would really notice much in terms of everyday boosts to option premiums. Still, any sustained and slow increase in volatility could be very helpful, not only in getting more in exchange for selling options, but more choices in the time frames used in those sales.

For next week I don’t expect too many new positions to be opened, although some of the weakness this week has made some positions more attractive. The weekend’s events in Iraq may have something to say about how widespread some of those “bargains” may become or may tell us whether there’s reasonable reason to believe that a near term floor to prices has been set or not.

Instead of thinking too much about new psoitions next week and spending down too much cash reserve, I’m hoping it will be a week of assignments, rollovers and most of all, newly covered positions.

That would cap off the month in a nice way, but first we have to get past the FOMC hurdle and the occasional mis-spoken word of phrase that can spook traders.



 







 

     

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:  GPS, LO, LVS, RIG

Puts Closed in order to take profits:  none

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

Calls Rolled over, taking profits, into extended weekly cycle:  C (6/27), EBAY (6/27), FDO (7/11), FDO (7/11), GM (6/27)

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:  HFC

Put contracts expired: none

Put contract rolled over: none

Long term call contracts sold:  none

Calls Assigned:   none

Calls Expired:    EBAY, HFC, PFE

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: KSS (6/9 $0.39), FDO (6/11 $0.31), NEM (6/10 $0.025)

Ex-dividend Positions Next Week:  LVS (6/18 $0.50)

 

 

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, BMY, C, CLF, COH, EBAY, FCX, HFC, JCP, LULU, MCP, MOS,  NEM, PBR ,PFE, RIG, TGT, 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.



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