Monthly Archives: June 2016

 

Option to Profit

Week in Review

 

June 13 – 17, 2016

 

NEW POSITIONS/STO	NEW STO	ROLLOVERS	CALLS ASSIGNED/PUTS EXPIRED	CALLS EXPIRED/PUTS ASSIGNED	CLOSED	EX-DIVIDEND
1  /  1	0	3	0   /   0	2   /   0	0	3

 

Weekly Up to Date Performance

June 13 – 17, 2016

Well, I don’t think anyone has any real clue of what happened this week.

I know I don’t, as there was certainly no theme for the week, other than more and more talk about the upcoming vote in Great Britain over continued membership in the European Union.

Last week we were left with nothing but uncertainty over what this week would bring and it only brought more uncertainty..

Somehow, with all of the uncertainty, I found a reason to part with a little bit of money, otherwise it would have been the third week in a row with nothing to really show for it.

Thanks to the strong showing by oil to end the week, that position ended the week 3.2% higher while the adjusted and unadjusted S&P 500 were each 1.2% lower’

Thanks to a very strong premium and the ability to roll the position over, it ended the week 4.4% higher than the S&P 500.

Existing positions were 0.8% higher than the S&P 500 for the week, however, that meant they still lost 0.4%.

With no new assignments on the week closed positions in 2016 were 8.3% higher, while the comparable performance for the S&P 500 during the same holding periods has been 1.7% higher. That represents a 383.6% difference in return on closed positions. That would be much more impressive if there were many more closed positions in 2016, but that just hasn’t been the case.

Even as existing positions lost 0.4% for the week, it wasn’t entirely terrible.

The single new position, which represented the third time that stock had been purchased in the past couple of months fared well.

There was also the opportunity to roll over 3 positions for the week and another 3 were ex-dividend.

That leaves next week, the first of the July 2016 option cycle having 2 expiring positions and another 2 ex-dividend positions, so there is a little less need to generate additional income.

AS in recent weeks, I would probably prefer the opportunity to rollover some of those expiring volatile positions, even if they are in the money. At this point, while I would like to raise some cash, I like the proposition of collecting a respectable dividend and still having a relatively large cushion in the event those shares do decline.

That was the situation on Monday, when I decided to roll the dice with the one of the 3 lots of the Gold Miners ETF i hold.

I thought about cashing in and perhaps either storing the cash or diversifying, but that combination of premium and cushion was just too enticing .

Next week, with just a little bit of cash, I’m still interested in opening some new positions, even as I may already have sufficient income opportunities.

All eyes are going to be focused on England as no one can agree where the vote will go, no what the impact of either direction would really be.

My guess is that the market would react negatively if England voted to leave and that would likely represent a buying opportunity once investors realize that nothing is going to change over night and there’s lots of reasons for both side of the English Channel to continue meaningful business and financial relationships.

Beyond that we may be back to oil and its big bounces, as we saw this week, but what we didn’t necessarily see was high concordance between stocks and oil.

Some days stocks followed the changes in oil very closely, including the intra-day changes and on other days the two completely ignored one another as other events, such as European Markets and FOMC news may have taken precedence.

Even as we look toward the mid-week vote, I think we may see as much confusion over where to go as we’ve seen the past 2 weeks.

For my part, as long as that drives up volatility and net asset value doesn’t suffer too much, I welcome any chance to get some premiums out of the action.

This past week did bring some uncovered positions closer to being able to get some cover as their premiums started rising.

Hopefully next week will continue that trend, as it’s hard to see any other trend developing

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:  MRO

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:  GDX (7/22)

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

Calls Rolled Over, taking profits, into a future monthly cycle:  DOW

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 Expi
red:  HPQ, UAL

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:    HPQ (6/6 $0.12), M (6/13 ^0.38), BBBY (6/15 $0.125)

Ex-dividend Positions Next Week: LVS (6/20 $0.72), JPY (6/20 $0.01)

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.