Category Archives: Week in Review

 

Option to Profit

Week in Review

 

September 28 – October 2, 2015

 

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

 

Weekly Up to Date Performance

September 28 – October 2, 2015

This was yet another week of real indecision with lots of daily and intra-day ups and downs.

So what else is new?

There were 2 new positions opened for the week and they out-performed the unadjusted and adjusted S&P 500 by  0.2%.

Those positions were 1.2% higher for the week while the adjusted and unadjusted S&P 500 finished 1.0% higher after lots of swings back and forth.

Thanks to some late week strength in energy and materials, existing positions were also able to bounce back from the deficit created earlier in the week.

For the year the 55 closed lots in 2015 continue to outperform the market. They are an average of 4.9% higher, while the comparable time adjusted S&P 500 average performance has been  1.0% higher. That difference represents a 400.5% performance differential. 

If you were looking for a theme this week, I’m not certain that you could easily find one, other
than that the market is continuing to find a home at right around that 10% correction level and it bounces around in great indecision right at that line.

While this was a week that spent most of its time confusing anyone that bothered to pay attention, it again felt like another good time to add some new positions as the market was still bouncing back and forth, but was staying relatively close to the line distinguishing between a market in correction and one that isn’t.

I really like those kind of markets and I never get bored by buying the same stock over and over as it or they may also bounce around a single point and somehow finding a way to return home.

Those large bounces back and forth are still helping to drive up volatility and the volatility rise is making premiums more attractive. One day the volatility falls in a big way and the next day it rises, along with the market. Volatility has also been settling into a comfortable range, but all it would take to shift that range would be a few consecutive days of large moves in the market either direction.

The market got off to a bad start on Monday and that worked out to be a good say to consider spending some money. Fortunately, the bounces later in the week offered some chances to sell calls, get rollovers done and see positions assigned.

Add to it a number of ex-dividend positions and it was another good week, but those still have been too far and few in-between.

With a little bit more cash to start next week a small number of positions set to expire next week and some more ex-dividend positions, there is again some more chance to create additional income next week.

As with the previous week, with the manner in which the market closed the week I’m not entirely certain what path looks predominant as the coming week gets ready to open. At the moment, I’d like to see another wave of weakness to open the coming week as I would like some opportunity to consider buying back what was assigned this week, although there are any number of appealing prospects to think about.

At the very least the market’s really strong comeback on Friday afternoon was just so perfectly timed, but it would be criminal to try and take credit for it.

Sometimes, it really helps to have good luck on your side and not just bad luck.

Earnings start next week, as well and so we may get a chance to think about fundamentals and hopefully see some reason to believe that Friday’s Employment Situation report was an aberration and that the economy is still heading toward a better and better place.

I’m willing to take that bet.

 

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:   BAC, GE

Puts Closed in order to take profits:  none

Calls Rolled over, taking profits, into the next weekly cycle: BAC

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:  HPQ (12/18), KO (12/18)

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned: DOW, GE ($24.50), GE ($25)

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: DOW (9/28 $0.42), EMC (9/29 $0.12), CSCO (10/1 $0.21)

Ex-dividend Positions Next Week:   GPS (10/5 $0.23)

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



 

Option to Profit

Week in Review

 

September 21 – 25, 2015

 

NEW POSITIONS/STO	NEW STO	ROLLOVERS	CALLS ASSIGNED/PUTS EXPIRED	CALLS EXPIRED/PUTS ASSIGNED	CLOSED	EX-DIVIDEND
4   /   4	0	2	2   /   0	0  /  0	0	1

 

Weekly Up to Date Performance

September 21 – 25, 2015

This was a week of real indecision.

Following last week’s bad reaction to news of no interest rate increase, the best we could do this week was a small bounce back on Monday.

As we flirted in and out of correction I bought more new positions in a single week than for quite some time.

The 4 new positions out-performed the unadjusted S&P 500 by  2.0% and also out-performed the unadjusted S&P 500 by 2.0%.

Those positions were 0.6% higher for the week while the unadjusted S&P 500 finished 1.4% lower and the unadjusted S&P 500 was 1.4% lower.

Existing positions trailed the S&P 500 by 0.9% for the week. Their relative performance was again dragged down my energy and materials.

For the year the 52 closed lots in 2015 continue to outperform the market. They are an average of 4.8% higher, while the comparable time adjusted S&P 500 average performance has been 1.1 % higher. That difference represents a 357.4% performance differential. 

While this was a week that spent most of its time exhibiting weakness, it did feel like a good time to add some new positions as the market was still bouncing back and forth, but was staying relatively close to the line distinguishing between a market in correction and one that isn’t.

Those large bounces back and forth are helping to drive up volatility and the volatility rise is making premiums more attractive.

Combined with prices on stocks that may already be in their own personal bear correction, that becomes more and more attractive, especially when there’s also a dividend involved.

The various strategies that can be used definitely increase as the volatility does, as well, as there is more premium built into in the money options and greater advantage to the Double DIp Dividend trades, even if the dividend ends up not being captured.

The market got off to a good start on Monday and for most of the day looked as if it was going to end the week even better than how it had started, as Janet Yellen may have removed some uncertainty late Thursday, after 3 really weak days.

Those days were nothing more than the market being confused and disappointed.

That’s a bad combination.

Fortunately, despite the weakness seen in the overall market, it wasn’t too bad of a week, with opportunity to create some income from the new positions that were opened, as well as the rollover trades that were able to be completed and a single ex-dividend position.

This was a good week to see a number of past ex-dividend positions suddenly show up as cash in the account and that’s always appreciated, although this week did have a decent number of active trades generating income. The dividends are more appreciated in those weeks where there isn’t very much trading to be done.

After having dug deeply to open those new positions this week I was especially happy to see the 2 assignments get made, but would have been happier if there were some more, but I won’t be complaining, given how the week was looking as it was getting ready to end the week.

With a little bit of cash and a small number of positions set to expire next week, including some positions going ex-dividend, there is some more chance to create some additional income next week.

With the manner in which the market closed the week I’m not entirely certain what path looks predominant as the coming week gets ready to open. At the moment, I’m not as positive about its direction as I was early this week. I was definitely willing to spend cash this week, but am not certain I’ll feel the same way when Monday gets here.

With next week ending with an Employment Situation Report and lots of key Federal Reserve people giving speeches, including Janet Yellen and Stanley Fischer, there’s good reason to believe that they’ll be re-inforcing the message that the interest rate hike is coming in 2015.

Janet Yellen did that yesterday and the market seemed to like that relative certainty, so next week there could be more of the same and a strong Employment Situation Report could really drive home the confidence that the market is developing that it can still thrive as interest rates begin a slow climb higher.

Here’s to good news, but I wouldn’t mind staying at these levels for a while and keeping volatility at these higher levels, as well.

 

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:   CY, BAC, DOW, GE

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:  GE (10/9), HFC (10/23)

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: ANF, BAC

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:  CY (9/22 $0.11)

Ex-dividend Positions Next Week:   DOW (9/28 $0.42), EMC (9/29 $0.12), CSCO (10/1 $0.21)

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



 

Option to Profit

Week in Review

 

September 14 – 18, 2015

 

NEW POSITIONS/STO	NEW STO	ROLLOVERS	CALLS ASSIGNED/PUTS EXPIRED	CALLS EXPIRED/PUTS ASSIGNED	CLOSED	EX-DIVIDEND
1  /  1	0	0	2  /  0	8  /  0	0	2

 

Weekly Up to Date Performance

September 14 – 18, 2015

This was a really terrible week, but for the right reasons.

More on that later.

There was only one new position opened this week and thanks to the late week sell-off, it was able to out-perform the market.

That single position was assigned after 3 days of holding and exceeded the performance of the unadjusted S&P 500 by 1.2%, but trailed the adjusted S&P 500 by 0.7%, reflecting the sharp decline following that assignment after Wednesday’s close.

The position was 1.1% higher, while the unadjusted S&P 500 was 0.1% lower and the unadjusted S&P 500 ended the week 1.8% higher.

Existing positions beat the S&P 500 by 0.2% for the week and were actually 0.1% higher for the week.

Beating is good, higher is better, but the differential wasn’t much to write home about.

For the year the 49 closed lots in 2015 continue to outperform the market. They are an average of 4.8% higher, while the comparable time adjusted S&P 500 average performance has been 1.1% higher. That difference represents a 357.4% performance differential. The differential is so big as to be meaningless.

What were the right reasons that made this week’s terrible market not so hard to accept?

It was the first time seeing the market come to an understanding that an increase in the interest rates wasn’t really a bad thing, especially at this early stage of a cycle. That helps to explain market strength earlier in the week, even as overseas markets in Asia continued to be very weak.

It was also the first time that the market was in a position to react to news of no such interest rate increase through a new and more mature lens.

And they didn’t like not getting the rate increase, because they finally came to understand that it’s a growing economy that warrants such an increase and the market is all about growth.

Last week I wrote: “It seems that the market is finally at peace with the probability that a rate increase is getting very near at hand.”

This week definitely showed that to be the case and the good news is that we may finally be back to a stage where it’s the fundamentals that count.

As far as fundamentals go, for my perspective personal fundamentals were awful this week.

With only a single new position opened and no rollovers and no new call positions sold, there wasn’t much in the way of income generation. Although there were a couple of ex-dividend positions, that’s really not enough for an entire week.

The real disappointment, though, was seeing the large losses coming in the days before the end of a monthly cycle’s expiration, as was the case this week.

That ends up adding far too many positions into the “uncovered” category.

Still, as bad as this week was, I’m left more optimistic than I have been for quite a while.

That optimism comes from the belief that investors are going to focus more and more on fundamentals and we’re going to move away from thinking that a handout from the Federal Reserve in the form of zero interest rates is the only thing to keep us afloat.

With the possibility that we are also beginning to distance ourselves from what is going on in China and possibly Japan, as well, that could be really good news.

With earnings set to begin once again in about 3 weeks, we may see an entirely new kind of market persona, which is much more like the market of the past.

If that can be coupled with some increased volatility, maybe settling into the 27 – 32 range, that could be a really nice place to create some additional income, even if the market is getting ready to take a rest for a while and create a new foundation for another leg higher.

If so, that would finally also open the door for more “DOH” trades and generation of some additional premium income for those that may be nimble enough to take counter measures on short notice in the event of a sudden move higher that would see shares otherwise assigned well below cost.

Still, while the S&P 500 is again moving into correction territory and those support levels are again being tested, it would be refreshing to have an environment where fundamentals rule the day.

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:   GE

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:  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: CVC, GE

Calls Expired:  CY, GDX, GPS, HPQ, KO, KSS, MOS, NEM

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:  GE (9/17 $0.23), LVS (9/18 $0.65)

Ex-dividend Positions Next Week:   CY (9/22 $0.11)

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



 

Option to Profit

Week in Review

 

September 7 – 11, 2015

 

NEW POSITIONS/STO	NEW STO	ROLLOVERS	CALLS ASSIGNED/PUTS EXPIRED	CALLS EXPIRED/PUTS ASSIGNED	CLOSED	EX-DIVIDEND
0  /  0	3	3	1  /  0	0  /  0	0	5

 

Weekly Up to Date Performance

September 7 – 11, 2015

This week ended up with no news at all, only a surprise that China didn’t gap lower after having taken a few additional days off.

In what can only be described as a major relief, even as China did head lower to begin the week and even as we were closed in celebration of Labor Day, our markets did not fall behind the curve and instead disassociated from the influence of the overnight Chinese trading.

In return, we actually had a stealth rally and may finally get some closure in the coming week as the FOMC may be poised to raise rates for the first time in nearly a decade.

There were no new positions opened again this week. In the meantime the S&P 500 gained 2.0%

After a number of weeks of out-performing the S&P 500, his week existing positions trailed, due to the weakness seen in energy and materials. They were still higher, but by only 0.5% on the week, reflecting a portfolio over-invested in energy and materials. The past few weeks demonstrate the adage “you live by the sword, you die by the sword.”

For the year the 47 closed lots in 2015 continue to outperform the market. They are an average of 4.8% higher, while the comparable time adjusted S&P 500 average performance has been 1.2% higher. That difference represents a 288.6% performance differential.

It seems that the market is finally at peace with the probability that a rate increase is getting very near at hand.

Even if the data may not seem to be in support of a move right now, considering how slowly economies translate reality into data, a move coming right now may be anticipatory and small enough not to do any harm if it ends up being premature.

People may be finally getting the notion that a rate increase is only going to be a reflection of an improving economy.

That, together with the realization that ours may be the best economy on the block may be giving nervous traders some confidence, especially as record high prices are no longer around to give people a reason to second guess themselves.

Let’s face it. Where else is the world’s money going to go at a time like this?

With this stealth rally, I couldn’t find any real reason to be buying. Part of that is that I really didn’t want to dig deeper into my own pockets to fund those purchases, as while cash has been far too low for my liking, it also hasn’t helped not having had any assignments for a while.

That finally changed this week with but a single assignment, although I was surprised that some $33.50 Best Buy calls weren’t exercised early to capture its dividend. I was actually hoping for that assignment and thought that I was pretty smart having rolled those contracts over twice in a couple of weeks in an effort to get even more than the equivalent of the dividend and still get my cash investment back.

But that’s not the way it worked out.

Still, it was another good week for income development thanks to the hesitant move ahead for the week.

That afforded opportunities to rollover positions as well as to sell calls on existing, but uncovered positions. Add to that another slew of ex-dividend positions and it turned out to be a second successive good week for income production.

Next week is the FOMC meeting and it is also the final week of the September 2015 cycle.

I’m always leery of when those coincide, especially if there’s also a Chairman’s press conference.

I’m not really expecting a sell-off from whatever decision the FOMC makes, but when you have a fair number of expiring positions on the line you are a little more concerned about their fates than you might normally be.

Hopefully we will continue on a path that doesn’t care too much about what will be unfolding in China and instead focus on the good news that promises to become even better news at home.

I don’t expect to be busy with new purchases next week, after a week of not having made any. I would love to see another week offering a chance to create some additional income from what already exists, although next week has only a single ex-dividend position to add to the collection plate.

With the FOMC Statement release coming on Thursday this time around there may be reason to consider pre-emptive moves in advance of that for any positions expiring next week, as two days is little enough time to recover from a bad reaction, but one day is even worse.

But that’s next week. In the meantime we have a few days to see whether China does anything over the weekend to get us thinking differently here on Monday morning.

 

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: none

Calls Rolled over, taking profits, into extended weekly cycle:  BBY ($33.50 10/23), BBY ($37 10/23)

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

Calls Rolled Over, taking profits, into a future monthly cycle:  HFC (10/16)

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

New STO:  BAC (10/2), DOW (12/18), IP (10/23),

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned: GE

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:  NEM (98 $0.025), GM (9/10 $0.36), KO (9/11 $0.33), BBY (9/11 $0.23)

Ex-dividend Positions Next Week:   LVS (9/18 $0.65)

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