Option to Profit Week in Review
November 10 – 14,  2014
 
NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED
4 / 4 2 3 3  /  0 2  / 0 0

    

Weekly Up to Date Performance

November 10 – 14, 2014

With 4 new purchases this week, it was still below the year’s average, but more active than in a while, even though there wasn’t too much going on in the markets or the world.

New purchases out-performed the unadjusted S&P 500 by 1.1% and the unndjusted S&P 500 by 0.9%. 

The new positions were ahead 1.1% for the week while the unadjusted index was 0.4% higher and the adjusted index was 0.5% higher.

 With this week’s 3 newly closed positions, bringing the 2014 total now to 183 positions, those have finished 3.5% higher, as compared to 1.8% for the S&P 500 for the comparable holding periods. That 1.7% advantage represents a 92.3% difference in return.

This was yet another week that was hard characterize.

As opposed to last week when lots of things happened, this week had very little going and and for the most part, the market was very sedate all through the week.

This was another week with very little options volume and again with fairly large bid and ask spreads, following the pattern of the past few weeks and making it increasingly difficult to get trades, especially rollovers accomplished at prices that make them worth doing.

While getting those kind of maintenance trades done, there was some opportunity to open new positions. More than in the past month, but still below where I would like a typical week to be.

At least the new positions performed reasonably well in a week that itself was mildly to moderately higher.

There were also some opportunities, although still far from enough, to sell some new options on uncovered positions. Add a couple of rollovers and a handful of assignments and it was beginning to feel a little bit more like an acceptable week. Of course, ultimately it always has to be the bottom line that’s the judge.

With some recycled cash to begin next we
ek and already having about 10 positions set to expire, I wouldn’t mind adding some new positions, but would especially like to be able to get option contracts expiring during the upcoming December 2014 option cycle.

However, with volatility so low, it is again challenging to find premiums that make it worth going out much in time, especially if the market continues reaching new highs. That’s especially true because the dried up option volume also makes it very difficult to close out positions that are well within the money in an attempt to put the assets to work in something more productive. That has been the case for Bristol Myers Squibb and Campbells Soup and was the case for International Paper.

While there is an FOMC Statement on Wednesday, there’s not too much on the economic calendar next week and earnings season is coming to its end,. There are, however, some potentially interesting trades for next week in that area. With a little bit of cash being added to the pile and what may be a traditional good last 6 weeks of the year, there may be reason to test the waters with the cash, possibly sacrificing some premium for share capital gains.

The one caveat is that with the FOMC coming just 2 days before the monthly option cycle ends, there may be some reason to be cautious and consider rollovers a little earlier than usual, in the event the market has some distaste for what will be said.

That hasn’t been the case for a really long time, but you never do know.

Hopefully the market will either continue in an uptrend or trade at current levels, offering some opportunity to either capitalize on premiums or share gains until the end of the year, when by some miracle, an entirely new mindset seems to always take hold, particularly as hedge funds start with a clean slate.

 



 

 

 

 

 

 

 

 

 

 

   

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:   CY, INTC, MAT, SBGI

Puts Closed in order to take profits:  none

Calls Rolled over, taking profits, into the next weekly cycleGDX, LO

Calls Rolled over, taking profits, into extended weekly cycle:  DOW (11/28)

Calls Rolled over, taking profits, into the monthly cycle: none

Calls Rolled Over, taking profits, into a future monthly cyclenone

Calls Rolled Up, taking net profits into same cyclenone

New STO:  LVS (11/22), TGT (12/20)

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned: EMC, INTC, IP

Calls Expired:  JOY, TMUS

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 PositionsCLF (11/12 $0.12), RIG (11/13 $0.75)

Ex-dividend Positions Next Week:  TGT (11/17 $0.51)

 

 

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, BX, BP, CHK, CLF, COH, EBAY, FCX, GM, GPS, HAL, HFC, .JCP,  LULU, LVS, MCP, MOS,  NEM, 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.