Daily Market Update – February 14, 2014 (Close) The Week in Review is now posted and the Weekend Update will be posted by 12 Noon on Monday.

 

Option to Profit Week in ReviewFebruary 10 – 14, 2014

NEW POSITIONS/STO	NEW STO	ROLLOVERS	CALLS ASSIGNED/PUTS EXPIRED	CALLS EXPIRED/PUTS ASSIGNED	CLOSED
5 / 5	4	2	6  / 0	3  / 0	1

    

Weekly Up to Date Performance

February 10 – 14, 2014

New purchases trailed the time adjusted S&P 500 this week by 0.5%, but lagged the unadjusted index by 1.1% during a week that saw a complete reversal of what had been considered to be the beginning to a correction.

The market showed an adjusted gain for the week of 1.6% and unadjusted gain of 2.3% for the week, while new positions gained  only 1.2% as premiums were reduced, reflec
ting the steep drop in volatility from just the prior week.

For the 35 positions closed in 2014, performance exceeded that of the S&P 500 by 1.5%. They were up 3.2% out-performing the market by 88.3%. Those results remain unusually high and will be reduced if market performance continues higher.

 While  it was another quiet week on the personal trading front I can learn not to mind that if the general trend is higher and the bottom line reflects that trend.

While new positions couldn’t keep up with a surging market that has almost completely erased the “correction” in just 7 trading sessions, it was a good week overall in total performance and the kind of trades that were made in order to put the portfolio into a better position for subsequent challenges.

For the first time in what has felt to be too long there was an opportunity to resupply the cash reserves thanks to 6 assignments. Coupled with some rollovers and new cover the week was an antidote to the cold weather and snow that’s befallen many.

Another nice aspect of this week that appears to be on track for next week as well is a decent number of ex-dividend positions and the downstream cash they will generate. Of course, I tend to focus on the one that got away, so I mourn the loss of Walgreen, still wondering what it did besides passively embrace cigarette sales, to warrant  its one week straight line climb higher. For the few that didn’t have their shares, or at least all of their shares assigned, you can’t possibly begin to understand.

Despite the fact that those shares fell about 2.5% today, I didn’t get too much satisfaction other than in knowing it may be drawing closer to a point that I would be willing to buy shares again.

Next week is a holiday shortened week and once again there isn’t really any reason to have a strong opinion in either direction. Unfortunately, volatility took a sharp decline in the past week, so there is little reason to look at longer term options, other than as a strategy to straddle expiration dates. The premiums just aren’t there, having disappeared almost overnight as the market just turned on a dime and demonstrated its resilience and resistance to correction.

With some more cash available to begin the week and the willingness to spend some of it, the only limiting factor is finding the cues to suggest that the market is a willing participant.and will, at the very least trade in a narrow range.

As with any week that the market rises very strongly, and 2.3% is pretty strong, it’s always a challenge to know where to begin the next week as relative bargains start to dry up. If the market can guarantee that it will keep going higher that’s not a terrible kind of problem to have.

Although there is no such guarantee, it’s still not a terrible problem to have. There is always something that has appeal, whether by virtue of recent under-performance, an upcoming dividend or fair option premiums.



While I’m still ambivalent about where assigned money will get recycled I am looking forward to next week, although premiums will be low due to a trade shortened week and the return to low volatility.

Additionally, as with many monthly cycles, as they come to an end there are many positions set to expire. Hopefully the coming week will continue with some additional strength in order to allow another week of assignments, rollovers and new covered positions for laggards.

 

 

 

 

  

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

(Note: Duplicate mention of positions reflects different priced lots):



New Positions Opened:  COH, IP, MA, MSFT, VZ

Puts Closed in order to take profits:  none

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

Calls Rolled over, taking profits, into extended weekly cycle: 

Calls Rolled over, taking profits, into the monthly cycle: ANF

Calls Rolled Over, taking profits, into a future monthly cycle:  none

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

New STO:  APC, CLF, INTC, LOW

Put contracts sold and still open: none

Put contracts expired: none

Put contract rolled over: none

Long term call contracts sold:  none

Calls Assigned:  COH, HAL, IP, MOS, TXN, WAG

Calls Expired: AIG, APC, COP, 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:  INTC (2/5 $0.225), MET (2/5 $0.28)

 

 

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For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, AIG,APC, C, CHK, CLF, COP,DRI, FCX, HFC,INTC, LB, JCP, LOW, LULU, MCP, MOS,  MRO, NEM, PBR, PM, RIG, TGT, TXN, 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.



Daily Market Update – February 14, 2014 (9:00 AM) The Week in Review will be posted by 6 PM and the Weekend Update will be posted by 12 Noon on Sunday.   Today’s possible trades include: Assignments: COH, HAL, IP, MOS, TXN Rollovers: ANF, APC Expirations:  AIG, COP, WFM Trades, if any, will be attempted to be made prior to 3:30 PM (EST)

Daily Market Update – February 13, 2014 (Close) The morning started with the realization that there was much more snow than anticipated. That usually makes for a slower trading day when New York City is part of the blanket, despite the decreasing reliance on floor traders. For some reason, the pre-opening futures were weak this morning and didn’t get better as Jobless Claims and Retail Sales information was eventually released. The release was slightly delayed and without the usual lifting of the embargo fanfare, as the snow slowed down the way things work in Washington, DC. While the jobless news was benign, except to those contained in the report, the Retail Sales should have come as no surprise, as there have been few rejoicing over the plight of retail shares. With everyone blaming the weather, the past week isn’t going to help. As someone mentioned on Twitter this morning in weather like this it’s obvious that Yuppies would rather stay home and eat gluten than go out and stock up on quinoa. Although there are still those talking about how good the earnings numbers have been it appears that the comparisons conveniently disregard the impact of share buy backs that only serve to inflate the earnings per share ratio. But beyond that, you don’t have to understand basic math and fundamental metrics. All you need to do is hear about retail weakness to know that in a consumer nation the lack of consumption isn’t a good thing. As far as share price, even Amazon hasn’t been immune of late as its razor thin margins, when there are any, isn’t what sustains business models. With what is likely to be a slow trading day, with or without a sizable move, there’s plenty of time for traders to wonder whether this morning’s trade lower is just a rest in the bounce back or a reconsideration of that bounce back. When you have nothing else to do your mind gets to ask those kind of questions, despite the fact that there’s no way in which to arrive at an answer that should instill confidence. Last week broke the pattern of very weak Fridays. Hopefully today’s trading will not set the stage for a return to that pattern, as I was looking forward to some assignments and setting the stage for a busy end to the monthly cycle. I suspected that today would just be another in a recent slow day of trading. The real challenge may just be in staying awake. Luckily I have the dog to see to it that boredom doesn’t overtake me as watching the monitors do nothing to fight off the sleep and there’s no way that I’ll be shoveling as a means to escape the tedium that may ensue once the news of the Comcast buyout of Time Warner Cable has been fully beaten to death. Hopefully this morning’s snow won’t do anything to knock out power, although this may be the day in which there’s little to be missed When the final bell rang it still wasn’t clear where the eventual optimism came from. I even surprised myself by making a purchase of MasterCard, a company I haven’t owned since long before the pre-split days when it traded at below $400. For some reason, despite understanding that the actual price of shares means little, as far as value goes, sometimes it’s just difficult to pick up shares that cost $800. The 10 to 1 split was welcome, especially since the finance sector is under-represented in my portfolio. While this week has been another in a series of slow ones, once again, I didn’t mind, as long as it meant watching assets grow. As much as I like to trade I don’t like getting to a point where it is clearly an addiction. Sometimes you just have to resist the need to feed that beast, but it isn’t easy. Today, I simply walked outside with a shovel in hand, having wired my computer to some powerful speakers and set the price alarms to alert me if anything was going on that needed my attention as I dealt with snow. My wife, who apparently is “essential” personnel was picked up at home by the hospital security 4 wheel drive and as a result of her getting into work. I received a call from one of the Emergency Room physicians telling me that all he had done today was confirming patient deaths. Guess what? From shoveling. Not only can snow be bad for earnings, but it can kill you, too. So I won’t be doing that tomorrow, no matter how boring it may get, although I do like my speaker set up. I may keep that going.