Option to Profit Week in Review
June 23 – 27,  2014
 
NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED
3 / 4 0 7 1  / 0 4  / 0 0

    

Weekly Up to Date Performance

June 23 – 27, 2014 

New purchases for the week beat the unadjusted S&P 500 by 0.4% and surpassed the adjusted index by 0.3%

The market did absolutely nothing for the week and may as well have extended its July 4th vacation and just stayed in the Hamptons all week long.

Another week of a minimal number of new positions saw them go 0.3% higher while the overall market was down 0.1 % on an unadjusted basis and 0.1% higher on an adjusted basis.

With only one assignment this week performance of positions closed in 2014 didn’t change very much and continue to out-perform the S&P 500 performance by 1.4%. They were up 3.4% out-performing the market by 69.8%. 

This was one of those weeks that the entire market should have just taken a vacation.

It was about as mediocre as you can get and so far the expression “Sell in May and go away” may turn out to be accurate for the first time in years.

The week was primed to start on an up note coming off of a week that had been buoyed by the Federal Reserve and that really had no forward looking headwinds other than its lofty height.

Maybe it’s the gravity that was the restraining force this week but the trading was more directionless than anything else, not really reflecting any inherent weakness or being shackled by any particular economic weakness or external threat.

Other than a series of government interventions that resulted in some significant sector movements there was absolutely nothing else of any importance this past week and given that next week is just a 3 1/2 day trading week, it’s not too likely that anything on the schedule will have much of an impact.

That may include the Emplotyment SItuation Report which is being released on a Thursday due to the Friday holiday. However, any indication that the revised GDP numbers may have more than just a relationship to bad weather could make the payroll report highly significant for the first time in a very long time, but I don’t think that will turn out to be the case.

Despite another incredible revision in the GDP, the employment numbers have been reasonably accurate and they ahve been fairly consistent, although you do have to wonder when that growth in the work force will translate into something readily observable in the retail marketplace.

But that’s next week.

This week was another in a string of disappointing weeks. With very little trading activity opening new positions, the back and forth of the market, with no real conviction left no opportunity to find new cover for uncovered positions.

The only positive that I can find from the week is the ability to rollover as many positions as we did, but even with that there were 4 new postions added to the uncovered list, as they expired today.

Lately, with the volatility so low there have been times that I would rather see the expiration thatnto take on the cost of closing out a position in the rollover process, because the forward week’s premiums are just so low compared to the expiring week’s premiums.

One such example was Pfizer. Despite some significant moves during the course of the week, up and down, its forward premium for next week and the week after were so low that the cost of rolling over became highly signicant, even if trading in volume.

The same was the case with Dow Chemical that fell in sympathy with DuPont, who surprised everyone with their reduced guidance at the market’s close on Thursday.

What you may have noticed is that most of the rollovers this week by passed the July 3rd expiration and we
nt to the July 11th. That means that with next week there is opportunity to still populate the July 3rd list of expirations, the following week or the monthly. However, even though next week is a very shortened week, there may be greater advantage to looking at July 3 expirations because they may have comparable premiums to those with longer time frames.

Bring back volatility and that will stop being the case.

Hopefully next week will be more definitive. Ultimately, when it comes to assessing a given week I don’t particularly care whether it is up or down, as long as it helps to drive lots of activity, because it’s all about milking the market and existing and new positions to generate as much additional money as possible. With weeks like this past one, even if the bottom line increases, there’s no particular glee if money can’t be skimmed from the assets without reducing them.

While I’m lazy, I want my stocks to work hard. This week they didn’t work very hard.

I may spend this weekend trying to think of an equivalent action to the ones taken by the guards in “Cool Hand Luke,” when one of the inmates didn’t give him a good day’s work.





 

     

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:  DOW, JPM, KSS

Puts Closed in order to take profits:  none

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

Calls Rolled over, taking profits, into extended weekly cycle:  BMY (7/11), EBAY (7/11), EBAY (7/11), GM (7/11), MA (7/11)

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:  none

Put contracts expired: none

Put contract rolled over: BBBY (7/11)

Long term call contracts sold:  none

Calls Assigned:  LVS

Calls Expired:   C, 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: DOW (6/26 $0.37)

Ex-dividend Positions Next Week:  BMY (7/1 $0.36), JPM (7/1 $0.40), WFM (7/1 $0.12)

 

 

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, PFE, PBR , 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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