Option to Profit Week in
Review –  February 2 – 6,  2015
 
NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED
0 / 0 1 3 1  /  0 1  / 0 0

    

Weekly Up to Date Performance

February 2 – 6, 2015

For only the second time in years, there were no new positions opened this week and hardly  any other trades, either.

For purposes of comparison, it’s probably a good thing that no new positions were opened this week, as it would have been a tall order being able to match the 3.0% advance for the S&P 500.

On a positive note existing
positions
were able to keep up with that advance as they were also 3.0% higher for the week, which is generally unexpected in a week that the market itself was so strong.

There was only a single assigned position this week and thus far the positions closed in 2015 are 4.9% higher, while the comparable time adjusted S&P 500 performance was 1.4% higher. That 3.5% difference represents a 247.4% performance differential that is very unlikely to be maintained through the year.

 

Up until Friday’s close, this week was virtually a mirror image of last week.

If you ever believed that the image in the mirror looked better than the original, you would certainly believe that was the case this week.

While last week, and for the most part 2015, has been made a little more palatable by virtue of out-performing the S&P 500, it’s far better to have more money at the end of the week to show for your efforts than it is to have bragging rights.

While I enjoy making trades and am not particularly thrilled when sitting around doing nothing, the color green makes doing nothing acceptable as long as it can last and not devolve into shades of red.

This was only the second time in years that there were no new positions opened during the week. The previous time, though, was only 3 months ago.

Partially, the reason for not plunging in and picking up new positions was the size of cash reserves and a real desire to add to the pile, rather than deplete it.

But with the week opening on a strong note and then doing so for a second consecutive day, it’s hard to want to get in when the predominant move has already been higher. Additionally, with so few positions set to expire this Friday, the idea of making new purchases on Wednesday or after would have meant either very small premiums for a weekly contract or going into the next week and further reducing the chances of assignments this week that could be used to replenish the cash pile.

As it is, it was another disappointing week as far as assignments would go.

I had been hopeful that MetLife and The Gap would join Halliburton and get assigned, especially as The Gap and MetLife have sales and earnings, respectively next week, but they, along with most of the rest of the market decided to give up mid-Friday afternoon.

Given the strong trading during the week and the comeback on Thursday from a rally killing end to Wednesday’s trading even with a little disappointment from Friday’s close, you have to be impressed with the way the market has come back from its recent losses.

Again.

The problem is that it has kept doing that over and over again since reaching market highs at the very end of December.

While some may point to that as being reflective of the market’s strength there are others who see it as being similar to the spasms seen before something undesirable happens.

I don’t have too much of an opinion on what all of these ups and downs mean, as long as the net result is only a small change. A week 3% higher after a week nearly 3% lower, coming after a week nearly 2% higher isn’t so bad as long as all of those big moves offset one another and create a feeling of uncertainty.

That feeling gets reflected in the option market and that’s good if you’re the one doing the selling.

In general, it’s not as good if you’re the one doing the buying, as you may also see when trying to close some positions or do rollovers.

Hopefully that volatility continues next week and it would be great if the market could continue an upward bias in its tone, although it would esp[ecially be nice to see the back and forths happening from day to day rather than week to week.

With a couple of rollovers this week now set to expire next week and with already enough positions set to expire the fo
llowing week as the cycle comes to an end, my preference for any new purchases next week is to look for weekly expiration opportunities.

However, I think it may be another quiet week as far as new positions go, just as there’s absolutely no clue what the market is thinking as it alternates between bull and bear and once again approaches all time highs.

The real signals may come in about 2 weeks as the major retailers start to report earnings and provide guidance. With today’s Employment Situation Report there’s  reason to believe that retail earnings may finally provide some evidence that lower energy prices and increased employment at higher wages will give a needed boost to the economy.

If today’s surge in interest rates is any indication that’s exactly what is the prevailing thought among those who live and die by those projections.

If so, then it’s up to the stock market to decide whether good news should be treated as being good news.

 

 

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:   none

Puts Closed in order to take profits:  none

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

Calls Rolled over, taking profits, into extended weekly cycle:  none

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

Calls Rolled Over, taking profits, into a future monthly cycleGME (3/20)

Calls Rolled Up, taking net profits into same cyclenone

New STO:  BAC

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned: HAL

Calls Expired:  EMC

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 PositionsINTC (2/4 $0.24), MET (2/4 $0.35)

Ex-dividend Positions Next Week: BP (2/11 $0.60)

 

 

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, BP, CHK, CLF, COH, DOW, FCX, HAL, HFC, .INTC, JCP, JOY, LVS, MAT, MCP, MET, MOS,  NEM, RIG, SBGI, 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.