Option to Profit
Week in Review
August 24 – 28, 2015
|NEW POSITIONS/STO||NEW STO||ROLLOVERS||CALLS ASSIGNED/PUTS EXPIRED||CALLS EXPIRED/PUTS ASSIGNED||CLOSED||EX-DIVIDEND|
|2 / 2||1||2||0 / 0||0 / 0||0||3|
Weekly Up to Date Performance
Well, that was some week and it came to a fairly sedate end, despite being anything but sedate, in-between.
Coming just a week after the worst week in 4 years, it was well welcome.
There were 2 new positions opened again this week, digging further into personal funds, effectively functioning as margin. Those new positions out-performed both the adjusted and the unadjusted S&P 500 by 5.2%. While the past few weeks new and existing positions have been out-performing, the difference is that this week the out-performance was more than simply ion relative terms, as positions gained for the week.
New positions were 6.1% higher, while the S&P 500 was able to gain 0.9% during that time period after turning things around very decisively Wednesday and Thursday. The unusually high performance was in part helped by using longer term options and by some premium enhancements due to increased volatility.
Just as some previous weeks were marked by weak performances in energy and materials, this week those sectors helped to not only out-perform, but to increase portfolio value for a change.
With no assignments once again, the 46 closed lots in 2015 continue to outperform the market. They are an average of 5.0% higher, while the comparable time adjusted S&P 500 average performance has been 1.3% higher. That difference represents a 283.3% performance differential.
Last week was easy to describe, as it was simply terrible.
This week began looking as if would be a repeat of that, but only worse, as an attempt to rally from the 600 point loss fizzled out.
Despite looking like a similar rally would do the same death dive the next day, something was able to inject some real confidence and strong buying, across all sectors, but especially in energy.
So this week was not so easy to describe, but it turned out to be a very good one from a number of perspectives.
It always helps to focus first on the bottom line and existing positions out-performed the broad market by an unusually large 0.8%, having advanced by 1.7% for the week. That was predominantly due to a late in the week spike in energy and materials, but that advantage over the broad market existed throughout the entire week.
It was also helped out by 2 rollovers, a new option sale on an uncovered position and 3 ex-dividend positions.
While I don’t know what next week’s activity may look like, there are already a number of positions set to expire, as opposed to this week that I elected to bypass with expiring positions.
Additionally next week has an unusually large number of ex-dividend positions to serve as income streams in the event that there are no new purchases and no rollovers.
Obviously, I’d like to be able to generate additional income from whatever is already on the books.
For those that watch volatility, you’ll notice that the past 2 days looked as if they broke the general trend of volatility only going higher when markets decline. In reality, however, that well over-simplified. Volatility, although it’s often said reflects uncertainty or the “fear factor,” is really nothing more than a statistical measure of change. So you can have volatility increases even if markets go higher, so long as that path higher is very jagged.
And it has definitely been that.
The good news is that the jagged path also leads to higher premiums and in the best of all worlds the net movement in the stock market is either flat or higher.
That hasn’t been the case since the latter half of 2011, but is now looking like that, if it can last.
I for one, really hope that it lasts.
(Note: Duplicate mention of positions reflects different priced lots):
New Positions Opened: GE, SBGI
Puts Closed in order to take profits: none
Calls Rolled over, taking profits, into the next weekly cycle: none
Calls Rolled over, taking profits, into extended weekly cycle: ANF (9/25)
Calls Rolled over, taking profits, into the monthly cycle: none
Calls Rolled Over, taking profits, into a future monthly cycle: BBY (10/16)
Calls Rolled Up, taking net profits into same cycle: none
New STO: INTC
Put contracts expired: none
Put contracts rolled over: none
Long term call contracts sold: none
Calls Assigned: none
Calls Expired: COH, FAST, INTC, LVS
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: MAT (8/24 $0.38), ANF (8/28 $0.20), SBGI (8/28$0.16)
Ex-dividend Positions Next Week: HAL (8/31 $0.18), HFC (8/31 $0.33), COH (9/3 $0.34), BAC (9/2 $0.05), MOS (9/1 $0.28), JOY (9/2 $0.20), KSS (9/4 $0.45)
For the coming week the existing positions have lots that still require the sale of contracts: AGQ, ANF, AZN, CHK, CLF, COH, FAST, FCX, GDX, GM, GPS, HAL, INTC, JCP, JOY, KMI, KSS, LVS, MCPIQ, MOS, RIG, WFM, WLTGQ (See “Weekly Performance” spreadsheet or PDF file)
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