|NEW POSITIONS/STO||NEW STO||ROLLOVERS||CALLS ASSIGNED/PUTS EXPIRED||CALLS EXPIRED/PUTS ASSIGNED||CLOSED|
|1 / 2||5||2||6 / 1||2 / 0||0|
Weekly Up to Date Performance
November 17 – 21, 2014
With only 2 new positions opened this week it was back to the pattern of the last 2 months, but even with the market’s strong 1.2% gain for the week the new positions fared well.
New purchases out-performed the unadjusted S&P 500 by 0.5% and the unadjusted S&P 500 by 0.8%.
The new positions were ahead 1.6% for the week while the unadjusted index was 1.2% higher and the adjusted index was 0.8% higher.
This week had many more positions closed than has been the case in recent weeks, but was more like previous month’s trading in the final week of a cycle, which when going as planned usually result in more assignments than for a weekly expiration.
With this week’s 8 newly closed positions, the 2014 total is now up to 191 positions. Those have finished 3.6% higher, as compared to 2.0% for the S&P 500 for the comparable holding periods. That 1.6% advantage represents a 83.1% difference in return.
Thanks to Mario Draghi and thanks to the Bank of China, and a special honorable thanks to the Federal Reserve for not messing things up this week, it turned out to be a good week.
If only there were actually more new positions opened it would have felt like weeks of old.
What made it feel somewhat better this week was that there was opportunity to get a little of everything done.
There were rollovers, there were new call sales and there were assignments and existing positions were able to keep up with the market’s 1.2% advance.
All of that leaves an increased cash supply for next week’s holiday shortened trading which tends to begin a 5 or 6 week period of market gains until the end of the year.
While it’s hard to imagine going even higher for the next few weeks, it is good to have cleared house a little owing to the assignments and having collected some premiums from laggards.
There still continues the frustration of the difficulty in getting rollover trades executed as volume remains light and the bid – ask spread continues to be unusually large. I had been trying, for example to close out the BMY and CPB positions for about 2 weeks, but just couldn’t get a reasonable offer to get the BTC portion completed on those trades, as has been the problem for the past month.
That led to the only real disappointment of the week, in not being able to rollover Lorillard, despite three days of attempts at varying expiration dates. I just couldn’t get those rolled over and I really did want to retain that dividend, as well as keeping the position open for what is looking likely a likely approval of its takeover by Reynolds American, which should then bring its shares more in line with the value of the offer on the table, which is in the $68 range.
So there may still be reason to repurchase those shares next week in advance of the dividend.
Otherwise,the low volatility continues to make rollovers difficult and skews the risk – reward proposition toward risk, there was also some opportunity to create some time diversification as the December 2014 option cycle gets ready to begin on Monday.
That mean that next week’s purchases, which already will have lower premiums due to the shortened trading week, may look a little more to the December 5, 2014 expiration than to the November 28th expiration.
One nice thing about next week is that there will be a number of ex-dividend positions, as there will be the following week. Increasingly, as premiums remain low, those dividends play an important role and that is why the loss of Lorillard was especially disappointing, although the chapter isn’t totally closed.
At least those may make up for the 1 1/2 days of less premium, but that won’t stop us from looking for more to stuff the portfolio.
(Note: Duplicate mention of positions reflects different priced lots):
New Positions Opened: JOY
Puts Closed in order to take profits: none
Calls Rolled over, taking profits, into the next weekly cycle: LVS
Calls Rolled over, taking profits, into extended weekly cycle: GDX (12/5)
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 cycle: none
New STO: BP (11/28), BX (12/5), EBAY (12/5), GPS (12/5), JOY (11/28)
Put contracts expired: BBY
Put contracts rolled over: none
Long term call contracts sold: none
Calls Assigned: BMY, CPB, CY, DRI, LO, SBGI
Calls Expired: FAST, PBR
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 (11/17 $0.5C2)
Ex-dividend Positions Next Week: MAT (11/24 $0.38), HFC (11/25 $0.50 Special Dividend), K (11/26 $0.49), SBGI (11/26 $0.16)
For the coming week the existing positions have lots that still require the sale of contracts: AGQ, ANF, CHK, CLF, COH, FAST, FCX, GM, HAL, HFC, .JCP, LULU, LVS, MCP, MOS, NEM, PBR, RIG, 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.