Option to Profit
Week in Review
May 23 – 27, 2016
|NEW POSITIONS/STO||NEW STO||ROLLOVERS||CALLS ASSIGNED/PUTS EXPIRED||CALLS EXPIRED/PUTS ASSIGNED||CLOSED||EX-DIVIDEND|
|1 / 1||0||1||0 / 0||0 / 0||0||3|
Weekly Up to Date Performance
May 23 – 16, 2016
This may have been the week that the market grew up.
That’s because they embraced the idea of higher interest rates coming as soon as in 3 weeks.
Although, if you remember what happened the last time the market grew up you might recall that embrace loosened very fast.
The market had a really spectacular week, with the S&P 500 gaining 2.3% on an unadjusted basis and 2.5% when factoring in the day in which that new position was opened.
Although the sole new purchase for the week gained 1.6%, it couldn’t keep up with the market’s performance and trailed the market by 0.7% on an unadjusted basis and 0.9% on an adjusted basis.
Existing positions, though, were only 0.7% higher, as they were the previous week. Their lack of relative performance was due to materials and precious metals having a rough week.
With no new assignments on the week those positions closed in 2016 were 8.2% higher, while the comparable performance for the S&P 500 during the same holding periods has been 1.6% higher. That represents a 418.2% difference in return on closed positions. Unfortunately, there are still very few closed positions on the year.
For the first time in a couple of weeks the market actually had a theme and it wasn’t oil.
This week the market embraced the idea that a slight increase in interest rates would be good for all involved.
With a slight upward revision in GDP and some decent earnings numbers as that season is coming to a close, there was maybe some reason to believe that the economy wasn’t so bad, after all.
Even with a more hawkish tone from Chairman Janet Yellen, markets were upbeat as the S&P 500 no stands only about 1.5% from its all time high.
Of course, that brings us back to the last time that the market embraced the idea of a rate increase coming soon.
That optimism vanished very quickly and took us into the first 6 weeks of 2016.
That wasn’t pretty.
This past week was another in a series of very quiet trading weeks.
While I am overloaded on energy, I couldn’t resist adding more shares of another in the sector, mostly to capture its dividend and the expectation that it was in a bottoming out pattern.
In fact, in the coming week, the only 2 expiring positions are both in the energy sector and I wouldn’t mind continuing to roll them over, even if they end up being in the money.
I may change my mind on that as the week progresses.
That’s because I still may be able to find a reason to add some new positions in order to generate some income and I also have 4 positions that are ex-dividend next week.
I’d be more inclined to roll an in the money positions over if I didn’t open any new positions, as I wouldn’t have quite the same need to replenish cash.
With a holiday shortened week coming up and volatility dropping, there may not be too many appealing premiums out there for a weekly contract, so I may be looking more at extended weekly options or even adding to the names that already have monthly June 2016 contracts coming up for expration.
For the next few days I won’t think about any of those things too much.
Happy and safe Memorial Day to all.
(Note: Duplicate mention of positions reflects different priced lots):
New Positions Opened: Holly Frontier
Puts Closed in order to take profits: none
Calls Rolled over, taking profits, into the next weekly cycle: Holly Frontier
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 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: HAL (5/27 $0.18), HFC (5/25 $0.33), IP (5/25 $0.44)
Ex-dividend Positions Next Week: MOS (5/31 $0.275), ANF (6/1 $0.20), BAC (6/1 $0.05), COH (6/1 $0.34)
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)
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