Monthly Archives: April 2016

 

Option to Profit

Week in Review

 

APRIL 4 – 8, 2016

 

NEW POSITIONS/STO	NEW STO	ROLLOVERS	CALLS ASSIGNED/PUTS EXPIRED	CALLS EXPIRED/PUTS ASSIGNED	CLOSED	EX-DIVIDEND
0  /  0	0	1	0   /   0	0   /   0	0	3

 

Weekly Up to Date Performance

April 4 – 8.March 28 – , 2016

This was just another in a series of weeks that have characterized 2016.

There was absolutely nothing of fundamental value to inspire markets in either direction.

Instead, it continues to be all about oil, with markets also sometimes reacting to occasional remarks from those who have say over where and when interest rates may be heading.

Friday initially looked like it might put some distance between itself and its baseline to start 2016, but the early strong gain disappeared and it was only the final 15 minutes that could bring the market into positive territory.

For the day and for the year.

Although I was willing to open new positions this week, I could find no reason to do so, even after a nice start to the week.

Instead of last week, in which I did the same and just watched, this time the S&P 500 finished 1.2% lower as the previous week finished 1.8% higher.

Existing positions matched the performance of the S&P 500 for the week finishing 0.1% better than the overall market, but again, that’s a hollow victory, as those positions were still 1.1% lower on the week.

For the most part, the Janet Yellen inspired rally of last week held.

Not in terms of points gained this week, but rather in there being no real challenge to the dovish tone that she had expressed.

With the FOMC minutes being released this week and with a few FOMC Governors speaking, it would have been very easy for some competing thoughts about the economy or the timing of interest rates to have reared their heads.

Instead, it was mostly calming words.

What moved the market and as the tally was settled, into negative territory, was again oil.

This week oil had some big moves up and big moves down.

The stock market followed, although its moves weren’t as exaggerated.

There was no point during this week that I felt ready to add new positions. That despite the fact that I was hoping to do so and was willing to part with some of the remaining small cash reserve.

Despite a good start to the week, I didn’t see any reason for confidence and the market’s action was fairly tepid and seemed even more unpredictable than usual.

Having just finished the first quarter, it seems all too neat and clean that the second quarter should begin as if nothing had preceded it.

The market’s decline for the week leaves it right where it started 2016 as we are about to head into a new earnings season next week.

I’m still prepared to add new positions, but I generally am not thrilled about doing so as a new season begins.

I often like to wait to get the financial sector out of the way and see whether it sets a tone, or not.

The over-riding tone, however, for the past year is that earnings season has been one quarter of disappointment after another.

With the big rush of stock buybacks already accomplished, and often at far higher stock prices, it may be interesting to see how comparisons fare, as the artificial boost to the metric that everyone follows, the P/E, can be so easily manipulated.

Next week marks the end of the April 2016 option cycle and for the first time in as long as I can recall, I was about to head into that ending week with nothing to expire.

That is until yesterday’s early rollover of the single position expiring this week.

Back when volatility was low, I hated to see a stock that was rolled over eventually head above its strike price before the close of trading on Friday. That’s because I preferred to get the assignment proceeds and plow the cash into some other income generating position.

But this week, with the volatility still high, at least on that position, I didn’t mind squeezing more return out of it and making it into a serial rollover position.

Otherwise, with only that position set to expire next week, it may be another very quiet week as we await those earnings and any hint that the economy may be doing better than we’ve giving it credit for.

I don’t know if that will be received as good or bad news, but it should be taken with a smile and could give the market reason to move higher.

This week’s details may be seen in the Weekly Performance spreadsheet * or in the PDF file, as well 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: MRO

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 cycle:  none

Calls Rolled Up, taking net profits into same cycle:  none

New STO: none

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned: none

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:    CSCO (4/4 $0.26), GPS (4/4 $0.23), WFM (4/6 $0.135)

Ex-dividend Positions Next Week:  none

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, AZN, BBBY, BBY, CHK, CLF, COH, CSCO,  CY, DOW, FAST, FCX, GDX, GM, GPS, HAL, HFC, HPQ, INTC, IP, JCP, JOY, KMI, KSS, LVS, MCPIQ, MOS, NEM, RIG, WFM, WLTGQ, WY (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.