Option to Profit

Week in Review

April 27 –  May 1,  2015

 

NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED
3 / 4 1 7 0  /  0 0 / 0 0

    

Weekly Up to Date Performance

April 27 – May 1,  2015

This was yet another nice week, although like most weeks, there’s always something that could have been better.

Unlike last week  when new positions were so impacted by a single bad acting position, this week a single well acting position was impactful.

With Lexmark’s rise new positions opened for the week beat the adjusted S&P 500 by 1.9% and the unadjusted S&P 500 by an even larger 2.0%

New positions gained 1.6% for the week. The unadjusted S&P 500, despite Friday’s nice gain, was 0.4% lower, while the adjusted S&P 500 was 0.3% lower.

As is often the case when the broad market is weaker, the existing positions tend to out-perform, especially if there is ability to sell new calls or rollover existing positions.

Existing positions were 1.5% higher for the week, having beat the S&P 500 by 1.1%. However, as in some previous weeks, some
of that performance advantage was due to the performance of the energy sector, just as that sector had been a drag at other times over the past few months.

There were no assignments this week so the closed position statistics remained unchanged. The 34 lots closed in 2015 continue to out-perform the market. They are an average of 5.5% higher, while the comparable time adjusted S&P 500 average performance has been 1.6% higher. That 3.9% difference represents a 253.9% performance differential. While I hope to see more positions closed, I would expect that differential to fall considerably.

This was another satisfying week, although it could have been made much better if there had been some assignments.

While I like to re-cap what was good, from week to week, I almost always think about what could have been better.

In this case, not having any posiitons get assigned means that there will be less likelihood of being very active in opening new positions next week and, therefore requiring greater need to be able to rollover exisiting posiitons or to be able to sell new call options on exisiting uncovered positions.

The market’s weakness beginning mid-week took positions that had the potential to be assigned fall away from their strikes.

Fortunately, the bounce on Friday created some opportunity for rollovers that didn’t look very likely as Thursday came to its close.

No matter whether things are looking bleak or looking great, it’s never a good idea to give up hope, nor to get too smug. It’s really amazing how tone, sentiment and outlook can all change so quickly, even when there’s nothing readily identifiable to blame or thank.

It was a week with lots of news and lots of moves, but not necessarily moves that were related to the news.

You would be hard pressed to explain Thursday’s nearly 200 point loss as you would trying to make much sense of Friday’s attempt to erase the previous day’s decline.

I gave up trying a long time ago.

Despite not having any assignments for the week, it turned out to be a good one for advancing net asset value, not only relative to the S&P 500, but also in absolute terms. For me, more importantly, it was a good week to generate income. It was nice to catch some good luck and be able to make all of those rollovers and even sneak in the sale of calls on some much under-loved shares of Coach.

Best of all, it was another week of not adding to the list of non-performing positions. I only wish that volatility was higher so that some of those could become “DOH Trades,” but for now, so many sit and develop cobwebs awaiting their turns.

Next week, however, the handcuffs are on a little bit as there’s no new cash being recycled to replenish the pile after establishing 4 new positions this week.

Additionally, while there are a handful of positions already set to expire next week, at the moment I’m not counting on too many of them being able to add to the cash pile either.

Of course, that bleak outlook could just as easily change as this week’s bleak outlook changed.

But, staying bleak for just a second more, that means, that if there are any new purchases next week, and I will likely tend to be tight-fisted, those new purchases will have to look at weekly options. That has to be done in order to have a better fighting chance of getting some assignments for next week.

While April didn’t turn out for market’s as history had portended, the first day of May was definitely not one to consider going away. Hopefully, that reality counter to history or wizened adages will continue for a while.


 

 

 



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:   AGM, KMI, LXK, TWTR (puts)

Puts Closed in order to take profits:  none

Calls Rolled over, taking profits, into the next weekly cycle: GDX, TWTR (puts)

Calls Rolled over, taking profits, into extended weekly cycle:  KMI (5/22), UAL (5/22)

Calls Rolled over, taking profits, into the monthly cycle: GPS

Calls Rolled Over, taking profits, into a future monthly cycle:  GM (6/2015), KO (6/2015)

Calls Rolled Up, taking net profits into same cyclenone

New STO:  COH (8/19)

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assignednone

Calls Expired:  none

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: KMI (4/28 $0.48)

Ex-dividend Positions Next Week: INTC (5/5 $0.24)

 

 

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, BAC, CHK, CLF,  FAST, FCX, HAL, HFC, .INTC, JCP, JOY, LVSMCP, MOS,  NEM, 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.