Category Archives: Week in Review

 

Option to Profit

Week in Review

 

May 18 – 22,  2015

 

NEW POSITIONS/STO	NEW STO	ROLLOVERS	CALLS ASSIGNED/PUTS EXPIRED	CALLS EXPIRED/PUTS ASSIGNED	CLOSED
1 / 0	0	7	0  /  0	0  / 0	1

    

Weekly Up to Date Performance

May 18 – 22, 2015

This was a very forgettable week.

The single new position for the week beat the adjusted and unadjusted S&P 500 by 1.9%.

That position gained 2.1% for the week. The unadjusted and adjusted S&P 500 ended the week having gone just 0.2% higher.

That high ROI was made possible by being able to pocket a full month’s worth of premium and a portion of the dividend while then closing out the position after just 4 days.

Existing positions broke their streak of out-performance this week as energy and materials, which had been primarily responsible for the previous out-performance faltered and were `1% lower for the week.

Lots closed in 2015 continue to out-perform the market. They are an average of 5.2% higher, while the comparable time adjusted S&P 500 average performance has been 1.5% higher. That 3.7% difference represents a 256.6% performance differential.  That’s too large to be sustained, but I’ve been saying that for a while, including much of 2014.

This was as about a quiet of a week in the market as you could expect. Virtually nothing happened to get anyone’s attention and there were virtually no intra-day moves, either.

The pre-opening futures all pointed toward quiet days and that’s exactly how it all worked out.

Neither the release of FOMC minutes nor Janet Yellen’s Friday afternoon speech did anything to move or excite markets. Next week doesn’t look much different, except that next Friday’s GDP release will be more critically looked at and maybe not act as much to shake markets if it holds a surprise.

Somehow, though, with a little bit of luck, there was an opportunity to get some rollovers done and to be able to close out the single new position opened for the week.

Doing that restored the cash pile to where it had begun the week and the rollovers at least helped to generate some cash for the week.

Equally lucky is that it was another week not adding to that list of uncovered positions, but by the same token, there were no opportunities to sell calls on uncovered positions this week.

That would have made it an especially nice and complete week, particularly as dividends were back in the mix thois week

Otherwise, there was absolutely nothing memorable about the week or really setting the tone for the coming week, which is a holiday shortened one.

While it was a very boring and staid week we are left in an unusual position, having only a single option set to expire next week. It’s not totally unexpected, as I mentioned that it might be a possibility sometime last week, but it almost became a reality, except for one position..

That’s almost like starting with a fresh slate.

The only position currently set to expire next week is the Market Vectors Gold Miners ETF, which I think has the distinction of being the single most rolled over position of the past 3 years. One of the 3 currently open lots It has now been rolled over 19 times in 6 months. During that time its price is up just 1%, but the premiums make it a 20% advance.

It’s too bad that they can’t all be like that.

With a little bit of cash reserves in hand, although I’d like to have more ammunition, I’m not adverse to spending any next week. The question may be whether to look at expirations for that week or for the following weeks, as the combination of low volatility and only 4 days worth of time will make for some paltry premiums if looking only at a weekly option.

With earnings now pretty much out of the way, the focus will intensify on interest rates, especially as some doubt has been raised about the validity of some of the data that may have played into the FOMC’s decisions to leave interest rates unchanged.

But for now, I just look forward to a nice relaxing Memorial Day weekend and hope that everyone is able to have one of those.

 

 

 

Note: For those who purchased Cablevision this week, the hope, by selling a deep in the money call in advance of the ex-dividend date was that the shares would be assigned early. That would have sacrificed the dividend in exchange for an entire month’s option premium.

I was very surprised that shares were not assigned early, but in hindsight the option volume seen on the day prior to the ex-dividend date suggests that some may have had an intuition about the very significant price rise that was to occur the following day.

That rise was fueled by two things.

The first wa the entrance onto the US scene of a European cable company that bought a small US provider and made it clear that it wanted to enter US markets in a bigger way. That lent price support across the spectrum. But beyond that, the Dolan Family, principal owners of Cablevision and who have used it very much as a personal play thing, expressed an interest in selling. That was the real surprise and that really sent the stock much higher than others in the sector.

At that point, with shares so deeply in the money and with volatility still so low, there was actually very little time value in the premium and very little to be gained by holding onto the position.

By closing the position at a NC of $19.89, effectively $0.04 of the dividend was retained and the overall ROI was 2.1% for the 4 days of holding.

I had considered closing the position on the third day of holding, however that may have subjected some to a free-riding violation if they had used unsettled funds to make the original share purchase.

While the ROI was reduced from 2.7% for the monthly contract to 2.1% for the 4 day holding period, presumably the recycled cash over the next 4 weekly periods can more than make up that 0.6% giveback.

 

 

 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 lo
ts):



New Positions Opened:   CVC

Puts Closed in order to take profits:  none

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

Calls Rolled over, taking profits, into extended weekly cycle:  ANF (6/5), DOW (7/2), KMI (6/26), MRO (6/5), TWTR puts (6/5)

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

Calls Rolled Over, taking profits, into a future monthly cycle:  UAL (Sep 18, 2015)

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:  CVC

Stock positions Closed to take losses: none

Calls Closed to Take Profits: none

Ex-dividend Positions: MRO (5/17 $0.21), CVC (5/20 $0.15), MAT (5/20 $0.38)

Ex-dividend Positions Next Week: LXK (5/27 $0.36), RIG (5/27 $0.15)

 

 

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, CHK, CLF,  FAST, FCX, HAL, .INTC, JCP, JOY, LVS,  MCP, MOS, RIG, WFM, WLT (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

  

May 11 – 15,  2015

 

 

NEW POSITIONS/STO	NEW STO	ROLLOVERS	CALLS ASSIGNED/PUTS EXPIRED	CALLS EXPIRED/PUTS ASSIGNED	CLOSED
2 / 0	2	7	3  /  0	0 / 0	1

    

Weekly Up to Date Performance

May 11 – 15, 2015

The last few weeks were rescued by Friday rallies. Fortunately this week Friday wasn’t the day to undo the positive price moves during the week, as the monthly cycle came to its end.

Thanks to some good luck and the market deciding that bad retail news was good for it, this turned out to be yet another in a series of nice weeks. Unlike some of those previous weeks, however, I don’t really have too much to complain about, as it was a rare week when everything seemed to click.

The missing piece the past few weeks was the lack of assignments. This week there were finally some assignments to add to the diminished cash reserve.

New positions opened for the week beat the adjusted and unadjusted S&P 500 by 0.1%.

New positions gained 0.4% for the week. The unadjusted and adjusted S&P 500 ended the week having gone 0.3% higher.

Existing positions also finished the week better than the overall market, beating its performance by 0.2%.

With some new positions to finally add to that list, the lots closed in 2015 continue to out-perform the market. They are an average of 5.3% higher, while the comparable time adjusted S&P 500 average performance has been 1.8% higher. That 3.5% difference represents a 253.9% performance differential. 

It has been nice having a string of weeks that have fulfilled the essential goals that I have each week.

That’s definitely been the case since the end of March, but the trend has been developing since the end of February. From that time through today’s close, the market is unchanged.

That has been a good breeding ground for generating premium related income from old and new holdings, even as assignments have been more sparse than I would ordinarily like to see.

This week was a good example of the kind of mix of transactions that would be great to have every week, but lately just hasn’t been the case.

What made this week feel better than most is
that there wasn’t too much of a need to spend new money in order to generate the weekly income goal.

All positions set to expire this week were either rolled over or assigned and there were a couple of new call positions sold on uncovered lots. Putting all of those trades together it was a busy week.

But with all of that, I do have one complaint.

There were no ex-dividend positions this week.

At least next week will have some of those as there is also now a little more breathing room in terms of cash reserves.

With the market hitting another new high to end the week I’m not necessarily thinking about spending down the limited cash reserve too quickly. With a number of positions already populating next week’s list of expiring positions, I would love to again see a combination of assignments, rollovers and new call sales.

That’s a combination that never really gets tiresome.

With the week following the next one being a holiday shortened week and with a sufficient number of expirations already in place for next week, any new purchases will likely either look at an expiration for next week or possibly for the week after the Memorial Day holiday.

That could potentially leave the possibility of no expiring positions during that week.

Of course, given how quickly the market can change its tone, that strategy can get scuttled fairly quickly, but more and more I am looking at some longer term options, even having now sold some for September 2015, despite the low volatility. That’s being done to get better positioned in the event of any correction that may be ahead. Going further along in time and selecting out of the money strikes seeks to find a balance between risk and share appreciation, while also buying some time for a recovery in the event of any near term correction.

With the S&P 500 at another new record high and with many technicians having looked at the 2120 level as one possibly leading to a breakout, I would love to be able to sit and watch that happen and try to capitalize on existing positions to create the income I like to see get created.

In the event that rocket doesn’t take off and the near term catalyst of earnings is now pretty much out of the way, having a little bit of cash in reserve might not be such a bad thing, but I would rather see those technicians be right and find myself getting more cash reserves from assignments and having that available for the next buying opportunity.

It has now been a couple of months since any correction scare and we may be a little overdue, but I wouldn’t mind if it still took another of couple of weeks for markets to make up their mind and get back into that pattern that we’ve been seeing for the past few years.

 

 

 

 

 

 

 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, SBGI

Puts Closed in order to take profits:  none

Calls Rolled over, taking profits, into the next weekly cycle: ANF, DOW, TWTR (puts)

Calls Rolled over, taking profits, into extended weekly cycle:  BBY (6/26), GPS (6/26), GPS (6/26)

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:  NEM (9/18), NEM (9/18)

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned: BAC, CY, SBGI

Calls Expired:  none

Puts Assigned:  none

Stock positions Closed to take profits:  ABBV

Stock positions Closed to take losses: none

Calls Closed to Take Profits: none

Ex-dividend Positions: none

Ex-dividend Positions Next Week: MRO (5/17 $0.21), MAT
(5/20 $0.38)

 

 

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, CHK, CLF,  FAST, FCX, HAL, .INTC, JCP, JOY, LVS,  MCP, MOS, RIG, WFM, WLT (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

  May 4 – 8,  2015 

 

NEW POSITIONS/STO	NEW STO	ROLLOVERS	CALLS ASSIGNED/PUTS EXPIRED	CALLS EXPIRED/PUTS ASSIGNED	CLOSED
2 / 0	3	5	0  /  0	2 / 0	0

    

Weekly Up to Date Performance

May 4 – 8, 2015

Now I really understand the meaning of “TGIF” after two consecutive week rescuing Fridays.

This then turned out to be yet another nice week, although like most weeks, there’s always something that could have been better.

Again, it was the lack of assignments, but this time there were also some expired positions that couldn’t be rolled over. It’s been a while since that has been the case, although that’s something easy to get used to.

New positions opened for the week beat the adjusted and unadjusted S&P 500 by 2.1%.

New positions gained 2.5% for the week. The unadjusted and adjusted S&P 500, despite Friday’s nice gain, barely ended the week having broken even, up just  0.4%.

This week the performance of existing positions was well distributed, rather than being highly concentrated in a few stocks or a single sector, such as energy stocks.

There were no assignments this week so the closed position statistics remained unchanged. The lots closed in 2015 continue to out-perform the market. They are an average of 5.5% higher, while the comparable time adjusted S&P 500 average performance has been 1.6% higher. That 3.9% difference represents a 253.9% performance differential. 

As with the previous week this was another in a string of satisfying weeks, although again it could have been made much better if there had been some assignments.

As with last week, that means that there will be less likelihood of being very active in opening new positions in the next week and, therefore requiring greater need to be able to rollover existing positions or to be able to sell new call options on existing uncovered positions.

With the monthly cycle coming to its end next week,  there are already enough candidates in the mix that could potentially give the combination of rollovers and assignments that has been elusive the past couple of weeks.

WIth  nothing really going on for the week everything was bottled up awaiting today’s Employment Situation Report.

The only possible report that could have done what it ended up doing was one that was neither too good nor too bad.

This one was right in the middle and could leave no one disappointed, nor elated. That way there’s less reason to believe that interest rates will increase and less reason to think that the economy has stopped growing.

At least that’s the story that everyone will go with.

With a real back and forth all week the market has had a hard time sticking with a single personality, although there’s not too much doubt that the bias continues to be upward. If you try, you know that it’s really hard to fight the current or go against the tape.

As volatility continues to fall, the contrarian, as well as the technician, may be in agreement that it is being set up for a strong move higher.

On the one hand you could wait for that and the higher premiums or sell options now at lower premiums.

The risk is that waiting and being right may also mean losing the chance of getting a strike price that you’re comfortable with having sold.

That’s why I’ve started looking at some longer term expirations, even having gone as far out as September 2015 with some of today’s sales and August 2015, previously.

If wrong about a correction impending, the use of well out of the money strikes will at least allow the possibility of some share appreciation if assigned. If right, well, at least there’s some premium to soften the blow a little.

With next week being the end of the monthly cycle and with lots of positions set to expire and very little cash reserve to make new purchases, I’m hopeful that the market will create opportunities to next to either make money from existing positions or at the very least allow those positions to switch allegiances and head into the cash reserve pile.

 With the market closing the week less than 0.2% from its all time highs, next week is actually a potentially market moving one, despite the general lack of economic news. What will be happening, though, is the earnings reports from the large national retailers that may have to be reconciled one way or another with next Wednesday’s retail Sales Report, as well.

Hopefully the news will be good, but not too good, so that we can get through next week and see those assignments and rollovers go through as I would love to have it scripted..

 

 

 

 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:   ANF, CY

Puts Closed in order to take profits:  none

Calls Rolled over, taking profits, into the next weekly cycle: ANF, TWTR (puts)

Calls Rolled over, taking profits, into extended weekly cycle:  AZN (6/12), GDX (5/22)

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

Calls Rolled Over, taking profits, into a future monthly cycle:  GDX (6/19)

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

New STO:  BAC (6/19), HFC (9/18), HFC (p/18)

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned: none

Calls Expired:  LVS, WFM

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: BP (5/6 $0.60), INTC (5/5 $0.24)

Ex-dividend Positions Next Week: none

 

 

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, CHK, CLF,  FAST, FCX, HA, .INTC, JCP, JOY, LVS,  MCP, MOS,  NEM, RIG, WFM, WLT (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.