Week in Review – November 2 – 6, 2015

 

Option to Profit

Week in Review

 

NOVEMBER 2 – 6, 2015

 

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

 

Weekly Up to Date Performance

November 2 – 6, 2015


The week started off with lots of promise and ended with a fizzle, but saw the market probably do the right thing heading into the Employment Situation Report on Friday.

There was only 1 new position opened for the week and it surpassed the unadjusted S&P 500 by 0.1% and the adjusted S&P 500 by 1.3% .

That single position was 1.1% higher for the week while the unadjusted S&P 500 was 1.0% higher and the adjusted S&P 500 was 0.2% lower.

That large discrepancy between adjusted and unadjusted performance is related to the timing of the purchase of that single position which happened on Tuesday, rather than on Monday when the market had its large gain.

Once again energy and commodities continued their weakness, despite having dome mid-week strength.

For the year the 70 closed lots in 2015 continue to outperform the market. They are an average of 4.6% higher, while the comparable time adjusted S&P 500 average performance has been  1.1% higher. That difference represents a 334.5% performance differential. 

The big news for the week was the Employment Situation Report, but it seems as if the market completely discounted the good news in its early trading for the week and then ended up actually taking it for what it was.

Good news.

This was yet another week of no real news, other than for Friday’s Employment Situation Report. Although there were lots of earnings reports, the reality is that Facebook doesn’t really matter as far as being a barometer of things.

Next week, though, as retailers do begin releasing their earnings, those could very well be the barometer that we and more importantly, the FOMC, have been looking for.

With a very strong gain in employment, well above the threshold that the FOMC has set, some strong retail numbers could finally convince everyone that the time has finally come for that interest rate increase.

If it does finally come in December, the IMF and ECB can’t get too upset with us, as we came close to waiting and holding off until 2016 as could possibly have been the case.

With only a single new position opened this past week and 2 assignments, there will be a little more added to the cash reserve, which is something that I’ve wanted to see for quite some time.

So far, it has worked out well borrowing from myself, in essence the equivalent of having used margin, in order to fuel some new position purchases over the past 2 months.

With those assignments and the rollovers for the week, in addition to the 2 ex-dividend positions, I finished the week reasonably satisfied, although I would have liked it if the week hadn’t gotten off to such a strong start and I could have perhaps added some of those ex-dividend trades.

I was also a little disappointed in not being able to sell any options on uncovered positions as the trades I had put in hoping to get made just wilted away as the week came to its end.

Next week, with cash in hand, I am definitely on the look out for some good reason to spend. With no contracts expiring next week I would like to be able to find a way to generate some cash from the money pile, but again, I’m not prone to being reckless with that money.

My hope is that there is some weakness to begin the week, just as I had hoped would have happened this week.

There are a couple of potential dividend plays next week and I think my focus will continue in that area, especially as volatility has again fallen so low.

Given how well the market seems to have accepted the good employment numbers, I think that it may be in a state of mind to act very rationally if retailers do start reporting good numbers next week. 

A little good news on the retail front could be just the thing to send the market beyond its August highs.

While that’s sad for volatility, it may be just the thing to take us into the holidays.

 

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:  MS

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 (11/27), WMT (12/11)

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

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

Calls Rolled Up, taking net profits into same cyclenone

New STO:  none

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned: INTC, MS

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: INTC (11/4 $0.24), BP (11/4 $0.60)

Ex-dividend Positions Next Week:   IP (11/12 $0.49)

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, AZN, CHK, CLF, COH, CY, FAST, FCX, GDX, 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.



Week In Review – October 26 – 30, 2015

 

Option to Profit

Week in Review

 

October 26 – 30, 2015

 

NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED EX-DIVIDEND
2   /   3 0 1 1   /   1 0  /  0 0 4

 

Weekly Up to Date Performance

October 26 – 30, 2015


This was a week that didn’t know what it really wanted and ended up with no conviction following a strong FOMC related move forward.

There were 3 new positions opened for the week and they surpassed the unadjusted S&P 500 by1.0 % and the adjusted S&P 500 by 0.8%.

Those positions were 1.2% higher for the week while the unadjusted S&P 500 was 0.2% higher and the adjusted S&P 500 was 0.4% higher.

Once again energy and commodities continued their weakness, despite making up some ground on Friday to end the week.

It just wasn’t enough to let existing positions surpass even a mediocre broader market.

For the year the 68 closed lots in 2015 continue to outperform the market. They are an average of 4.6% higher, while the comparable time adjusted S&P 500 average performance has been  1.1% higher. That difference represents a 319.3% performance differential. 

The big news for the week was the FOMC Statement release.

Prior to the release and for the two days after the release, the market was basically comatose, although it went for a wild alternating ride in the 20 minutes surrounding the release.

Earnings reports for the week made very little difference.

All of that leads to us next week and wondering what will be there to move markets, particularly since the really important retail sector doesn’t report until the following week.

This past week was a decent one in that there were some good opportunities to open positions and collect some dividends.

It would have been nicer if there were some opportunities to sell calls on existing positions, but at least there were some assignments and a rollover for the week, in addition to those ex-dividend positions.

With some of that money getting put back for recycling, I wouldn’t mind being able to make the same trades as were made this week, taking a look at Morgan Stanley and Seagate Technology once again, just as a few weeks earlier it had been Bank of America and General Electric that were in play for a number of consecutive weeks.

That’s boring, but it can be a really good type of boring.

With the money to spend, I would really like to see the week open on a decline. If it does so, I’d be inclined to add as many new positions as in the past few weeks. Otherwise, I’d be happy to hold onto my money and look for any opportunity to sell calls on those existing, non-performing positions.

Next week may just be one big question mark and unless there’s some big or unexpected news, that may be the theme until the December FOMC meeting.

 

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:  F, MS, STX, (puts)

Puts Closed in order to take profits:  none

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

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 cyclenone

New STO:  none

Put contracts expired: STX

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned: MS

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 PositionsKMI (10/29 $0.51), WY (10/28 $0.31), MS (10/28 $0.15), F (10/28 $0.15)

Ex-dividend Positions Next Week:   

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, AZN, CHK, CLF, COH, CY, FAST, FCX, GDX, 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.



Week In Review – October 19 – 23, 2015

 

Option to Profit

Week in Review

 

October 19 – 23, 2015

 

NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED EX-DIVIDEND
2   /   3 1 4 3   /   1 0  /  0 0 1

 

Weekly Up to Date Performance

October 19 – 23, 2015

The latter part of the week was a perfect storm and in a good way for the market and it had its fourth consecutive gaining week, ever since the turnaround on the day the last Employment Situation Report was released.

There were 3 new positions opened for the week, but they lagged both the adjusted and unadjusted S&P 500 by 1.0%

Those positions were still 1.1% higher for the week, but just couldn’t keep pace with the S&P 500 which finished 2.1% higher thanks to the tremendous gains on Thursday and Friday.

This week energy and commodities continued their weakness, as did healthcare, but everything else was buoyed the last two days of the week.  Existing positions were flat for the week lagging the overall market, just as in the previous as they were compromised by energy and materials.

For the year the 66 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 321.9% performance differential. 

Earnings reports started coming this week and they were for the most part pretty uninspiring until the close of trading on Thursday.

On that day the market was already heading toward a 320 point gain as the ECB gave US markets a gift before the open by suggesting that their version of QE was going to continue.

The rally was prolonged with the first real set of good earnings numbers and they came from important players: Google, Microsoft and Amazon, representing 3 very different segments of the consumer discretionary and business worlds.

If they were reporting better revenues and profits how could that not have some meaning for the broader economy?

So stocks surged again, further helped by a rate decrease by the People’s Bank of China in their effort to jump start their economy which was just reported to be struggling along with a GDP growing at just 7%.

Just 7%?

So this was a good week all around.

There were 3 new positions opened and 4 positions were rolled over, in addition to finding some coverage for an uncovered position.

There was also a single ex-dividend position.

Best of all, there was the assignment of 3 positions and the expiration of one short put sale, helping to free up some cash to either sit or be redeployed.

With all of that, however, there are no positions set to expire next week, so the likelihood is that if any new positions are opened with the increased cash position, they will look for either a dividend or a weekly time frame.

My expectation had been that the coming week was likely to show some euphoria as there was little reason to suspect that the FOMC would raise interest rates. Since we are back on a “bad news is good news” mindset, that would likely give reason for more buying.

However, with so much of an advance this week and someone bound to raise the issue of how far off will that rate increase now be once we’ve seen such strong earnings from some key players, I’m not as convinced of next week’s strength, anymore.

With next week still offering so many companies reporting earnings some care has to be taken to not get overly exposed to companies that have that added risk feature. Despite the great earnings reported by Google et al, the earnings season has otherwise not been very encouraging and has offered lots of punishment for those disappointing even by just a little.

With cash available next week, I would again be happy to see some weakness creep back in, at least maybe to start the week.

Friday’s strong close has placed some of the positions that I was eyeing for next week more expensive than I would like, so I may be more passive than  I would prefer to be as the next week gets off to its start.

With volatility suddenly taking a dive and returning close to where it was a month ago some of the easy new position trades and rollovers will likely be on hiatus, but next week may hold some surprises if the FOMC takes note of some evidence of an economy that’s heating up in key sectors and changes the wording of its statement to reflect that observation.

I’ll be tuned in.


 

 

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:  MS, STX, (puts), WMT

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:  IP (12/18)

Calls Rolled Up, taking net profits into same cyclenone

New STO:  INTC (1/16/16)

Put contracts expired: STX

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned: BBY ($33.50), MET, MS

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: FAST (10/23 $0.28)

Ex-dividend Positions Next Week:   KMI (10/29 $0.51), WY (10/28 $0.31)

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, AZN, CHK, CLF, COH, CY, FAST, FCX, GDX, 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.



Week in Review – October 12 – 16, 2015

 

Option to Profit

Week in Review

 

October 12 – 16, 2015

 

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

 

Weekly Up to Date Performance

October 12 – 16, 2015

Following multiple consecutive weeks of indecisive trading, last week was anything but indecisive, but this week we were back again to not knowing what we want.

There were 3 new positions opened for the week and they surpassed the adjusted S&P 500 by 0.5% and the unadjusted and adjusted S&P 500 by 0.6%

Those positions were 1.6% higher for the week while the adjusted S&P 500 finished 1.1% higher and the unadjusted S&P 500 finished 0.9% higher.

This week it was the turn for weakness to re-appear in energy and materials.  Existing positions were lower for the week and this time they lagged the overall market, just as previous weeks they were lead higher by energy and materials.

For the year the 62 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  1.1% higher. That difference represents a 339.2% performance differential. 

Earnings reports started coming this week and they were, if nothing, confusing.

The market took some big moves during the week, but for no real reason. What happened was simply a return to much of the summer when there was a back and forth volley between large moves higher and equally, if not larger moves lower.

This week the market ended up with a net result that took the middle ground and at least gave little to lose any stomach lining over, although these days individual shares are prone to erode more lining than ever before.

Actually, the combination of large moves up and large moves lower that leaves you with a net positive can actually be as close to an ideal situation as you can define, because those back and forths drive up volatility supported option premiums while at the same time seeing assets grow, rather than getting eroded.

It was another week that saw more new positions established than had been the case during most of the summer and I’m happy to see that continuing to be the case. Next week it would be easier to continue on that path if the week opens with some significant weakness and closes with strength.

Those are by far the best.

WIth another week having some assignments I’m also happy to see some cash getting put back into the still all too small pile and wouldn’t mind putting the money back to work next week.

A couple of new positions finding cover and a couple of ex-dividend positions for the week generated enough income to keep me pacified over the week, although there were also 2 positions that saw their options expire.

Next week continues earnings and they actually will be much more representative than this week had been, which was predominated by the financials.

I’m definitely open to putting money to work, as next week doesn’t have very many expiring positions and only a single ex-dividend position. The challenge will be trying to discern between value and value traps.

Lately there has been a lot of luck as most of the recent new positions represented real value, but as we still see from day to day, the market is very capable of moving strongly in any direction and without requiring  a reason for doing so.

While I’m willing to spend money next week, that would be much more likely if the market is either flat or lower to start the week. Today’s gain continues the market’s resurgence that started two weeks earlier and had been almost uninterrupted. A little bit of a breather or some movement backward to fill in the ground beneath the more than 6% gain the  past week would be really nice.

 

 

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:  ABBV, ANF, MET

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 cyclenone

New STO:  GDX ($21 12/15), GDX ($22 1/15/16)

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned: ABBV, ANF,  MET

Calls Expired:  EMC, MRO

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: FCX (10/13 $0.05), ABBV (10/13 $0.51)

Ex-dividend Positions Next Week:   FAST (10/23 $0.28)

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, AZN, CHK, CLF, COH, CY, FAST, FCX, GDX, 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.



Week in Review – October 5 – 9, 2015

 

Option to Profit

Week in Review

 

October 5 – 9, 2015

 

NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED EX-DIVIDEND
2   /   2 3 1 4   /   0 0  /  0 0 1

 

Weekly Up to Date Performance

October 5 – 9, 2015

Following multiple consecutive weeks of indecisive trading, there was no question what the frame of mind was this week.

It was higher, higher and higher. Even if  a given day didn’t really add much to the indexes, what they didn’t do was go much lower, as has been the case whenever the market was able to put together even just a single good day over the past couple of months.

There were 2 new positions opened for the week and they lagged the unadjusted and adjusted S&P 500 by 1.6%. They did well, but couldn’t keep up with the market, since they were capped by their strike prices in a week that the market just kept moving higher.

Those positions were 1.7% higher for the week while the adjusted and unadjusted S&P 500 finished a remarkable 3.2% higher.

Thanks to continuing strength in energy and materials, despite some give back to end the week, existing positions performed well and out-performed an already strong market. They were actually an unusually large 1.2% ahead of the S&P 500 for the week, but as with past weeks they also represent a liability in the event of their weakness.

For the year the 59 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 350.6% performance differential. 

If you were looking for a theme this week it was easy to find.

It looks as if we’re back to partying over the prospects of a delay in interest rates once again.

That’s a really sudden change from just a couple of weeks ago and is an example of what to do when life gives you lemons.

Maybe it’s not so hard to explain why the sudden re-embrace of what is beginning to sound like a weaker than expected economy, but that could mean having to go through the fear of a rise in interest rates again.

Sooner or later there has to be one, but it just keeps seeming later and later even after it seemed to be right around the corner.

This was a good week from just about every perspective.

There was finally a week that had a meaningful number of assignments and there were no stocks having options expire worthless.

Additionally, there was some opportunity to create new covered positions and to still be able to take some advantage of the mildly elevated volatility. There was even a chance to rollover a position that wasn’t due for a while, as its price just rocks back and forth with the energy complex and with each of those gyrations opportunity presents itself to make some additional return on a fundamentally sound position.

Next week marks the end of the October 2015 option cycle and uncharacteristically, there aren’t many positions set to expire next week.

What there is, is more cash than usual to put back to work, although I would really like to see the market consolidate just a little. It has gone up too much and too fast since the previous Friday, so that should lead people to believe that we’re either at a precipice of a break out higher or a drop back to reality.

That doesn’t really help, though.

Both are plausible, but I don’t think that I want to get overly reckless with the cash that will suddenly be available for re-investment next week.

Earnings will really get off the ground next week as financials begin to report, but as we’ve seen for the last couple of years, that sector can be strong, but nothing has to follow.

The real key will be whether we finally see retail reporting earnings that reflect the fall out from lower energy prices.

If really looking for a reason for markets to go higher, that is the best catalyst that I can think of and is definitely not one to fear, even if leading to increased interest rates.

 

 

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, MET

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:  HFC (10/30)

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 cyclenone

New STO:  BAC (12/18), CSCO (11/20), GM (1/15/16)

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned: ANF, BAC, GE, MET

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: GPS (10/5 $0.23)

Ex-dividend Positions Next Week:   FCX (10/13 $0.05)

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, AZN, CHK, CLF, COH, CY, FAST, FCX, GDX, 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.



Week In Review – September 28 – October 2, 2015

 

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 cyclenone

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 PositionsDOW (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.



Week In Review – September 21 – 25, 2015

 

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 cyclenone

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.



Week in Review – September 14 – 18, 2015

 

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 cyclenone

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.



Week In Review – September 7 – 11, 2015

 

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 cyclenone

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.



Weekend Update – September 6, 2015

Stop and take a break.

I’ve been doing just that, taking a break, for about the past 5 years, but sometimes I think that I’m working harder than ever.

Lately, however, I don’t feel as if I’m on a forward path so it may be time to do exactly what the Chinese stock markets did last week and what the US stock markets are doing this coming week.

They both took some time off and perhaps it was timed to perfection. After a 42% decline in Shanghai in less than 10 weeks and a 10% drop in the S&P 500 in 6 weeks, it was definitely time to take a breather and smell the dying flowers.

China took a couple of days off for celebrations ostensibly commemorating the end of World War II. While doing so they may also have wanted to show the nation and the world just how together they have things and just how much in control they really are at a time when the image is becoming otherwise.

After all, if the Faustian Bargain in place can no longer deliver on the promise of a higher standard of living, the message of an all powerful government has to be reinforced, lest people think they can opt out of the deal and choose democracy instead.

Equally ostensibly, guided by environmental concerns and the health of its citizens, the Chinese government decided to have factories in and around Beijing closed for the days preceding the festivities in order to help clear the air a bit, but only in a non-metaphorical kind of way. The literal and figurative haze is far too thick for cosmetic actions to change anything.

Unfortunately, what we may be coming to realize is that the Chinese economic miracle we’ve come to admire may be the actual culprit for all of that pollution, through its extensive use of smoke and mirrors.

While taking some time off it’s not entirely clear whether any other “malicious short sellers” are disappearing from view and being prevented from polluting trading markets or whether arrests and detentions are also taking a much needed holiday.

Here in the United States we celebrate Labor Day by not working, rather than working extra hard and we rarely send anyone to prison for accelerating the process that leads to a financial slide.

As long as people are beginning to make comparisons between the current market correction that seems to be related to China’s market meltdown and our own financial meltdown of the past decade, it only seems appropriate to note that the key difference between our nations in that regard is that Countrywide CEO Angelo Mozilo could never have gotten a natural suntan in Beijing.

He also wouldn’t have ever seen the light of day, even it such a thing was possible through all of that haze, again after suddenly disappearing on a less than voluntary basis.

In the United States Labor Day comes every year, but a 70th anniversary celebration of the end of World War II comes but once and it may not have come as a better time, as the world is wondering just what is going on in China.

Putting the brakes on the ever-present haze and lung clogging air for a couple of days won’t make much difference and so far, neither have efforts to control market forces. Both have lots of momentum behind them and are likely to remain recalcitrant in the near term, even to the most totalitarian of governments.

When it comes to managing the economy we may be at the tip of the iceberg in terms of realizing that no one really knows what’s going on and just how accurately the modern miracle has been portrayed. But that’s the usual situation when smoke and mirrors are in place and the stakes so high.

While the Chinese markets were closed a little bit of calm overtook US markets, as there was some evidence with the release of the ADP Employment Report that bad news was again being interpreted as being good, insofar as it could delay interest rate hikes from the FOMC.

The subsequent fading of any meaningful rally to offset large losses earlier in the week was disappointing, but it was the good news and bad news nature of the Employment Situation Report that sent markets tumbling without any help from China.

The good news that was interpreted as being bad and, therefore, making a rate hike more likely at the next FOMC meeting was that the unemployment rate fell to 5.1% even in the face of mildly disappointing growth in employment and wage stagnation.

Even dusting off twice removed Federal Reserve Chairman Alan Greenspan to appropriately comment that there’s no logical reason to fear a small rate increase did nothing to re-introduce rational thought into those engaged in indiscriminate selling.

Ending the week with a large loss was bad enough. But doing so and being left behind the eight ball more than usual this week as the Shanghai market re-opens for business on Sunday makes this weekend more uncertain than usual. With Labor Day serving as an additional day to be handcuffed as passive observers we stand to have China once again put us in a position of reaction, rather than leading the world with its most vibrant and sustainable economy.

So, while I really welcome, want and need the day off on Monday for more reasons than usual, I can’t wait for Tuesday.

That makes about as much sense as everything else these days.

As usual, the week’s potential stock selections are classified as being in the Traditional, Double Dip Dividend, Momentum or “PEE” categories.

“Buying on the dip” hasn’t been as prevalent as in the past during what turned out to be a series of mini-corrections, as we’ve watched the market head into correction, then out of correction, back in and out again. For some reason, though, I’ve been a little more active in adding new positions than I would have expected at the beginning of each of the past few weeks, in the belief some price levels truly represented opportunities.

Most of that interest in buying has been dividend driven and this week is definitely one that is likely to continue that trend if I can justify the faith necessary to add any new positions.

With the exception of Best Buy (BBY) which had a very nice week as the S&P 500 fell by over 3% and Altria (MO), which matched the index for its poor performance, the remaining selections going ex-dividend this week all badly trailed the S&P 500 last week.

That’s not exactly the basis for a strong recommendation, but with the exception of BHP Billiton (BHP), it may be difficult to find a really good reason for such under-performance.

Not that it’s much consolation, however, all but BHP Billiton have actually out-performed the S&P 500 since its top, although Best Buy is the only one to have actually appreciated in share value.

Some of the potential selections, such as Altria (MO) and Merck (MRK) haven’t been very attractive “Double Dip Dividend” selections for quite a while. In a low volatility environment in the context of a relatively large premium essentially spanning the distance from one $0.50 strike level to the next, there has been very little subsidy of the dividend by the option premium and those stocks were much more likely to be assigned early if in the money.

However, the volatility induced increase in premiums is beginning to make even these high yielders that also have large dividends in absolute terms more and more worthy of consideration.

In a week that pharmaceutical companies struggled to keep up with the S&P 500 I do like the potential trades, specifically to attempt to capture dividends and option premiums in Merck and Gilead (GILD). In both cases, that’s being considered without regard to issues of pipeline.

Due to the increased market volatility their premiums make them both especially attractive considerations this week. in addition as they have also lagged the S&P 500 over the past week and month.

Merck is ex-dividend on Friday and I would consider selling a weekly in the money strike, but being prepared to roll the position over to the following week if assignment seems likely. With a dividend of $0.45, that generally means that the closing price on Thursday would have to be at least $0.45 in the money for a logical investor to exercise their options, although Merck is frequently subject to dividend arbitrage and is more likely than most to be exercised even if there is just a very small margin above that threshold price, especially if there is very little time remaining on the contract.

Gilead, on the other hand is ex-dividend on Monday of the following week. For that reason I would consider selling an in the money option contract expiring at the end of the September 2015 option cycle and wouldn’t be disappointed if the contract was exercised early. In essence the additional premium received for the week of time value atones for the early assignment.

Pfizer (PFE), on the other hand, is not ex-dividend this week, but has finally returned to a price level that I wouldn’t mind once again owning shares.

During the period of its share price climb, as is so often the case, the option premiums became less and less enticing. However, now that it has had a 13% decline in the past month, that premium is finally at a point that it offers adequate reward for the risk of further decline.

As with Merck and Gilead, the consideration of Pfizer isn’t based on pipeline nor on fundamental considerations, but purely on price and premium.

While healthcare stocks generally out-performed the S&P 500 over the past week, one notable exception was UnitedHealth Group (UNH), which is also ex-dividend this week.

In my home state of Maryland the regulatory agency approved a 26% increase in rates for Anthem (ANTM), but small premium declines for UnitedHealth policies on Friday. The relative weakness in UnitedHealth shares, however, was week long and not likely influenced by that news, as Anthem is by far the major insurance carrier in that state.

However, as is so increasingly the case, the combination of an uncertainty induced higher option premium, a dividend and the potential for some bounce back in short term share price is very appealing.

Especially when logic would dictate that China poses no threat to UnitedHealth Group’s performance, as long as logic is permitted free expression for a change.

American International Group (AIG) also goes ex-dividend this week.

I haven’t owned shares in a while and certainly haven’t done so since the passing of Robert Ben Mosche, who I considered an essentially unsung hero. His calm and steady guidance of AIG, having returned from retirement on the beaches of Croatia, was an antithesis to the reckless actions of Angelo Mozilo.

However, with its return to respectability as a company and as a stock came a decrease in option premiums and even with the re-institution of a dividend, it wasn’t a magnet for investment.

This week, the situation is different.

With a significantly increased dividend, a nearly 10% decline in the past month, an enhanced option premium and the likelihood of interest rates moving higher, AIG may be ready to hit on all cylinders.

After so much discussion about healthcare and insurance related stocks, it only seems fair to give Altria some attention. Prior to spinning off Philip Morris (PM), which was the real engine of its growth from its international activities, this was a true triple threat stock. It had great option premiums, a generous dividend and room for share appreciation, as long as you were willing to let other people participate in their own Faustian deal.

However, with the loss of Philip Morris’ growth and with declining option premiums, it has lost its luster for me, just as it has the ability to take the sheen off from health pulmonary tissue.

However, a recent 6% decline, a growing option premium and a great dividend are reasons to consider welcoming it back into the fold, even if not permitting its use in your home.

I already own two lots of Best Buy shares and rolled both over early in order to have a better chance of capturing the dividend. As with Merck, those shares go ex-dividend on Friday.

However, as opposed to Merck and so many others that are near some near term price lows, Best Buy gained in price the past week and has been doing so since reporting its earnings recently.

I would consider purchasing another lot of Best Buy shares but would be willing to cede the dividend to early assignment, based on the generous option premiums. To do so, that might be accomplished by purchasing shares and selling in the money weekly calls or even deeper in the money calls expiring the following week.

Palo Alto Networks (PANW) reports earnings this week and as with even relatively “safe” stocks of late, it may not be for the faint hearted, as it can and has made some fairly significant price moves in the past when earnings have been released.

As it is, shares of this enterprise security company are already 14% lower in the past month and meaningful price support is still about another 10% lower.

The option market is implying a 7.8% price move next week. However, a 1% weekly ROI may be potentially obtained through the sale of a weekly put contract at a strike price 10.2% below Friday’s closing price.

While the options market is beginning to do a better job of estimating price performance after a period of under-estimating downside risk, I think that there may still be some additional risk, so I would probably defer those put sales until after earnings and only in the event that there is a sharp decline in shares that could bring it closer to that support level.

For those willing to play in the land of risk, BHP Billiton is ex-dividend this week and offers a semi-annual dividend that appears to be safe, despite a nearly 8% yield. While it has decreased its dividend minimally in the past, nearly 14 years ago, it has never suspended it, despite some significant decreases in commodity prices over the years and in contrast to others, such as Freeport-McMoRan (FCX).

BHP Billiton offers only monthly option contracts and doesn’t have strike levels gradated in single or half dollar units. With its current price almost perfectly between the $32.50 and $35 strike levels and its ex-dividend date occurring early in the week, the potential short term strategies are to either sell an in the money option with a high likelihood of early assignment, or an out of the money option in the hopes of getting it all.

Finally, I missed the last strong move higher by LuLuLemon Athletica (LULU) and had shares assigned after that climb that left me in the dust. I was still happy to be out of those shares after a 13 month holding period. While it had an ROI of 10.3% that was only 0.6% better than the S&P 500 for the same period of time, so not a very worthwhile way to park money, all in all.

LuLuLemon reports earnings this week and it’s no stranger to large price moves.

Prior to this very recent increase in market volatility the options market has been under-estimating the price range that a number of stocks might move upon earnings release and I was more inclined to consider a trade, such as the sale of puts, only after earnings were released and shares plummeted beyond the lower boundary implied by the options market.

However, as volatility has made a return, the price ranges implied by the options market is beginning to increase and it is getting easier to find strike levels outside of the range that can return my threshold 1% ROI on the sale of a weekly put contract. 

The option market has implied a price move of 9.6% and a 1% ROI could potentially be achieved through the sale of a put option if shares fall less than 11.5% following earnings.

Unlike Palo Alto Networks and unlike so many other stocks in the investor’s universe, LuLuLemon is within reach of its 52 week high, which certainly makes it stand out in a crowd, even if not bent over sufficiently to bring any defectively sheer garments to their limits.

While on a different recent path from Palo Alto Networks, LuLuLemon is also a trade that I would consider only in the event of a sharp price decline and would seek to take advantage of any selling done in panic mode.

Unless of course that turns out to be the theme for the week, in which case I would rather wait for some calmer heads to prevail before loosening the grip on cash.

Traditional Stock: Pfizer

Momentum Stock: none

Double-Dip Dividend:  Altria (9/11), American International Group (9/10), Best Buy (9/11), BHP Billiton (9/9), Gilead (9/14), Merck (9/11), UnitedHealth Group (9/9)

Premiums Enhanced by Earnings: LuLuLemon Athletica (9/10 AM), Palo Alto Networks (9/9 PM)

Remember, these are just guidelines for the coming week. The above selections may become actionable – most often coupling a share purchase with call option sales or the sale of covered put contracts – in adjustment to and consideration of market movements. The overriding objective is to create a healthy income stream for the week, with reduction of trading risk.

Week In Review – August 31 – September 4, 2015

 

Option to Profit

Week in Review

 

August 31 – September 4, 2015

 

NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED EX-DIVIDEND
3  /  3 0 5 0  /  0 3  /  0 0 8

 

Weekly Up to Date Performance

August 31 – September 4, 2015

Another miserable week for the overall market and another miserable Friday to end the week.

Coming just 2 weeks after the worst week in 4 years, you have to wonder why we bothered with the week in-between. That week brought us out of officil correction territory, while this week brought us right back.

There were 3 new positions opened again this week, digging further into personal funds, effectively functioning as margin. Those new positions out-performed the adjusted S&P 500 by 4.2% and the unadjusted S&P 500 by 4.5%. While the past few week’s new and existing positions have been out-performing, the difference was that last week the out-performance was more than simply in relative terms, as positions gained for the week. This week, however, we were back to out-performing in relative terms, but losing net ground, nonetheless.

New positions were 1.1% higher, while the adjusted S&P 500  lost 3.1% and the unadjusted S&P 500 lost 3.4% during the week that some misery compounded, despite an attempt to bounce back during the mid-week. 

Existing positions finished the week an unusually large 2.5% higher than the S&P 500, but that didn’t really make up for their overall 1.3% loss for the week.

With no assignments once again,  the 46 closed lots in 2015 continue to outperform the market. They are an average of 5.0% higher, while the comparable time adjusted S&P 500 average performance has been 1.3% higher. That difference represents a 283.3% performance differential.

This week was another one that was simple to describe. As has been the case all too frequently lately, it was a terrible week.

Last week was easy to describe, as it was simply terrible.

The attempt to bounce back from early week losses was far too little and without backbone.

More and more it looks as if those nice moves higher are what they have historically been. Nothing more than something to suck you in as a bear market is developing. Whether there is another 9% or more to the downside, I don’t know, but I don’t think that will be the case.

While there hasn’t been the typical “buying on the dip” with the declines seen over the past month, I’ve started adding positions.

While I feel good about those new positions, especially if they’re coupled with dividends and better than the kind of premiums that have become the “new norm,” it is telling just how quickly their impending assignments just evaporate into thin air.

With just one day left to the week I thought that there was a very good chance of at least getting 2 assignments. Instead, there were none. Luckily, all 3 positions opened this week could be rolled over fairly easily and with a little bit of expiration date staggering, as well.

While the market hasn’t been very investor friendly lately, where there do appear to be opportunities the returns can be better than in a market that moves higher. The premiums and dividends can be very nice, especially if there’s also some capital gains on the shares as part of the equation.

Fortunately, this week was a good one as far as income generation goes. With 8 ex-dividend positions, 3 new positions opened and then 5 rollovers, it almost felt like old times again.

I felt the same way last week, but that is frequently how it feels when the volatility decides to play along. It does tend to be much more fun, even if the overall market is going lower. The ability to out-perform in a down market is something that most agree is a critical component of long term investing health.

That old saying about the market being able to stay irrational longer than you can stay solvent is less likely to be true when you can cushion the paper losses with income of any sort. The past month or so has really reflected what additional income streams can do during a period of market weakness.

For the coming week I’m still willing to dip into my additional funds and do what Donald Trump does, by giving myself a loan to make more stock purchases. I’d rather do that than risk a margin call. At least I have my better interests at heart. I’m not certain that I could say the same about my or anyone’s brokerage.

However, while willing and while there are a number of good ex-dividend positions next week, I still would rather see some opportunity to rollover existing positions, especially those expiring in 2 weeks when the September 2015 cycle comes to its end.

With only one position set to expire next week, there isn’t too much additional income that could accrue from that position, but at least there are a number of ex-dividend positions, as well.

The big question will be what will China’s markets do after taking a few days off and what will ours do, perhaps in response after we’ve had the additional holiday day to fall behind the curve, if China goes off the road.

For now, I won’t think about any of that and instead look forward to a nice, quiet week and a happy and safe Labor Day to everyone.


 

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, MOS, HPQ

Puts Closed in order to take profits:  none

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

Calls Rolled over, taking profits, into extended weekly cycle:  BBY (10/9)

Calls Rolled over, taking profits, into the monthly cycle: HPQ, MOS

Calls Rolled Over, taking profits, into a future monthly cycle:  UAL (12/18)

Calls Rolled Up, taking net profits into same cyclenone

New STO:  none

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned: none

Calls Expired:  BAC, CSCO, IP

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 (8/31 $0.18), HFC (8/31 $0.33), COH (9/3 $0.34), BAC (9/2 $0.05), MOS (9/1 $0.28), JOY (9/2 $0.20), HPQ (9/4 $0.18), KSS (9/4 $0.45)

Ex-dividend Positions Next Week:   NEM (98 $0.025), GM (9/10 $0.36), KO (9/11 $0.33), BBY (9/11 $0.23)

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.



Week in Review – August 24 – 28, 2015

 

Option to Profit

Week in Review

 

August 24 – 28, 2015

 

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

 

Weekly Up to Date Performance

August 24 – 28, 2015

Well, that was some week and it came to a fairly sedate end, despite being anything but sedate, in-between.

Coming just a week after the worst week in 4 years, it was well welcome.

There were 2 new positions opened again this week, digging further into personal funds, effectively functioning as margin. Those new positions out-performed both the adjusted and the unadjusted S&P 500 by 5.2%. While the past few weeks new and existing positions have been out-performing, the difference is that this week the out-performance was more than simply ion relative terms, as positions gained for the week.

New positions were 6.1% higher, while the S&P 500 was able to gain 0.9% during that time period after turning things around very decisively Wednesday and Thursday. The unusually high performance was in part helped by using longer term options and by some premium enhancements due to increased volatility.

Just as some previous weeks were marked by weak performances in energy and materials, this week those sectors helped to not only out-perform, but to increase portfolio value for a change.

With no assignments once again,  the 46 closed lots in 2015 continue to outperform the market. They are an average of 5.0% higher, while the comparable time adjusted S&P 500 average performance has been 1.3% higher. That difference represents a 283.3% performance differential.

Last week was easy to describe, as it was simply terrible.

This week began looking as if would be a repeat of that, but only worse, as an attempt to rally from the 600 point loss fizzled out.

Despite looking like a similar rally would do the same death dive the next day, something was able to inject some real confidence and strong buying, across all sectors, but especially in energy.

So this week was not so easy to describe, but it turned out to be a very good one from a number of perspectives.

It always helps to focus first on the bottom line and existing positions out-performed the broad market by an unusually large 0.8%, having advanced by 1.7% for the week. That was predominantly due to a late in the week spike in energy and materials, but that advantage over the broad market existed throughout the entire week.

It was also helped out by 2 rollovers, a new option sale on an uncovered position and 3 ex-dividend positions.

While I don’t know what next week’s activity may look like, there are already a number of positions set to expire, as opposed to this week that I elected to bypass with expiring positions.

Additionally next week has an unusually large number of ex-dividend positions to serve as income streams in the event that there are no new purchases and no rollovers.

Obviously, I’d like to be able to generate additional income from whatever is already on the books.

For those that watch volatility, you’ll notice that the past 2 days looked as if they broke the general trend of volatility only going higher when markets decline. In reality, however, that well over-simplified. Volatility, although it’s often said reflects uncertainty or the “fear factor,” is really nothing more than a statistical measure of change. So you can have volatility increases even if markets go higher, so long as that path higher is very jagged.

And it has definitely been that.

The good news is that the jagged path also leads to higher premiums and in the best of all worlds the net movement in the stock market is either flat or higher.

That hasn’t been the case since the latter half of 2011, but is now looking like that, if it can last.

I for one, really hope that it lasts.

 

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, SBGI

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:  ANF (9/25)

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

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

Calls Rolled Up, taking net profits into same cyclenone

New STO:  INTC

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned: none

Calls Expired:  COH, FAST, INTC, LVS

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 MAT (8/24 $0.38), ANF (8/28 $0.20), SBGI (8/28$0.16)

Ex-dividend Positions Next Week:   HAL (8/31 $0.18), HFC (8/31 $0.33), COH (9/3 $0.34), BAC (9/2 $0.05), MOS (9/1 $0.28), JOY (9/2 $0.20), KSS (9/4 $0.45)

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, AZN, CHK, CLF, COH, FAST, FCX, GDX, GM, GPS, HAL, INTC, 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.



Week in Review – August 17 – 21, 2015

 

Option to Profit

Week in Review

 

August 17 – 21, 2015

 

NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED EX-DIVIDEND
2  /  2 0 6 0  /  0 4  /  0 0 3

 

Weekly Up to Date Performance

August 17 – 21, 2015

We’ve recently had a series of weeks that have been really hard to classify.

That’s not the case with this week as there aren’t too many ways to sugarcoat the events for the week.

It was still a week, though, that we could point our fingers toward China, but we also did nothing to help ourselves as earnings couldn’t offset the plunges on the other side of the world, especially when the earnings weren’t very good.

As opposed to last week in which there was a relative oddity of not ending the week on a sour note, today’s close more than made up for the lack of a bad finish to last week as this was the single worst performing week in 4 years.

There were 2 new positions opened this week. They out-performed the unadjusted S&P 500 by 4.0% and the unadjusted S&P 500 by 4.0%. However, those new positions still lost 1.8% for the week.

In comparison, both the adjusted and unadjusted S&P 500 measures were 5.8% lower for the week, marking the worst week in 4 years.

Despite a very poor weak for the energy sector and materials, existng positions out-performed the broad market by 3.0%, but they were 2.8% lower on the week.

With no assignments once again,  the 46 closed lots in 2015 continue to outperform the market. They are an average of 5.0% higher, while the comparable time adjusted S&P 500 average performance has been 1.3% higher. That difference represents a 283.3% performance differential.

This week was an easy one to describe.

It was terrible.

It started as a week of reversals. Some of those early reversals in the week could have given some reason to be optimistic until along came an intraday reversal to a reversal.

The rest of the week really fell apart once the market’s valiant attempt to climb back from a 200 point loss was rebuffed and sent us right back toward the lows of the day.

The cumulative loss on the DJIA the following 2 days was about 900 points. That’s more reminiscent of 2008 and 2009 than anything in recent memory.

It’s weeks like this though that you depend on your hedges to limit those losses and somehow there was reasonably good opportunity to execute a number of rollovers. Those rollovers helped to beat the market for the week, but again, it’s all relative. The week was still a net loser.

As it was, in relative terms it was a better week than for the next guy due to those hedges and the ability to get a decent number of rollovers done. It was also good to have some of the ex-dividend positions, but this week nothing was immune from the down draft that blew in from China.

Although the week started with the equally reasonable chance of seeing a number of positions get assigned, it feels lucky to be able to have gotten whatever rollovers could be executed.

While there were a number of expiring positions, with the exception of Intel, those all represented call sales made on positions that were well out of the money and just done in order to generate a little bit of additional revenue while praying for the unlikely to happen.

I think I would take that chance again if the opportunities rolled around next week, although the time frame on those options is going to be increased.

What will be interesting to see is just how those premiums will be enhanced by the very sudden and dramatic increase in volatility this week. That may make it more inviting to make some “DOH” trades, as the reward may finally start to be getting more in line with the risk of assignment at strike prices that are way too low for comfort.

Following a quick scan of premiums for the next week and beyond, there is already very tangible evidence of those premiums moving higher.

With no assignments this week and using only cash that is the equivalent of trading on margin, I’m very unlikely to want to add new positions next week, but some of these prices are just so appealing right now, especially in the finance sector.

The greatest likelihood is that if adding new positions or if being able to sell calls on existing psotions, I’m going to think more about selling into an extended weekly time frame, rather than a weekly contract.

That leaves the possibility of having absolutely no positions expiring next Friday, but using the extended weekly options may be able to lock into some better premiums and could also give some more time for the market or individual stocks to see a rebound following this week.

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, CVC

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:  ANF (9/4), CSCO (9/4), HFC (10/2), IP (9/4)

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

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

Calls Rolled Up, taking net profits into same cyclenone

New STO:  none

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned: none

Calls Expired:  COH, FAST, INTC, LVS

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 MRO (8/17 $0.21), CVC (8/19 $0.15), RIG (8/21 $0.15)

Ex-dividend Positions Next Week:   MAT (8/24 $0.38)

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, AZN, CHK, CLF, COH, FAST, FCX, GDX, GM, GPS, HAL, INTC, 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.



Week in Review – August 10 – 14, 2015

 

Option to Profit

Week in Review

 

August 10 – 14, 2015

 

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

 

Weekly Up to Date Performance

August 10 – 14, 2015

It was another strange weak that seemed to be dependent on what China was thinking, but at least this one didn’t end with another horrific Friday.

The market was still simply a continuation of that weekly back and forth pattern that has been the rule for the summer. This week, though it was that way intra-week, as well.

We saw big swings from day to day, as well as from morning to afternoon.

The week ended up not doing much on a net basis, but at least there was some opportunity to get some trading done.

There was only one new position opened this week, but that has become more the norm than the exception.

That position out-performed the unadjusted S&P 500 by 1.4% and unadjusted S&P 500 by 2.7%.

That new position was 2.0% higher for the week while the unadjusted S&P 500 was 0.7% higher for the week and the adjusted S&P 500 was 0.6% lower.

Energy and materials moderated a little this week, but retail sales are looking fairly weak, as those earnings started getting reported over the past ew days and will continue next week.

 With no assignments once again,  the 46 closed lots in 2015 continue to outperform the market. They are an average of 5.0% higher, while the comparable time adjusted S&P 500 average performance has been 1.3% higher. That difference represents a 283.3% performance differential.

This was another week that was very hard to characterize..

It wasn’t as bad as last week when we saw earnings devastate some invincible seeming stocks, but it was a week that showed just how much we are tied to unpredictable events in China.

What is a little concerning is that whenever an economy is in need of central bank intervention, it’s always a little bit of a crap shoot. You never really know whether the economy is going to respond in a text book sort of way. But it does help to have had an institutional history with taking bold steps.

In the case of China, they’re pretty new at this capitalism game and they don’t necessarily have the same depth of experience in managing events.

The manner in which they devalued their currency on three occasions this week, with rushing in to support it sandwiched in between, may indicate a decision process that isn’t necessarily based on anything but a seat by the pants approach.

That may have also been the case a few weeks ago when it took some steps to bring their plummeting stock markets under control, as well.

What you can really understand is why Jack Ma, the founder of Ali Baba was more than happy to have his company listed on the NYSE, rather than back home and why he is very much in a diversifying of assets mode, especially looking for assets outside of China.

From a positive perspective the market once again respected its sup[port levels and it seems that what we had gotten used to as the new age kind of correction at levels 5% below the highs is now becoming something more like 3.5%.

We haven’t been able to get a 5% mini-correction now for a few months, but we have had a number of those even smaller 3.5% corrections.

With Friday’s close higher the S&P 500 is now just 2% below its all time highs as it made a sudden turnaround at about noon on Wednesday, when it looked as if the 5% level might finally be reached.

This past week was another with no assignments and no opportunity to replenish cash. As I discussed last week I was willing to dip into a personal form of margin by investing funds that I typically keep separate from that followed in the OTP portfolio. However, closing out the Texas Instruments position made that unnecessary this week.

It may, however, be necessary this coming week.

Otherwise, it was a reasonably good week, with one uncovered position getting a new call written, four rollovers and 2 ex-dividend positions.

Next week brings the end of the August 2015 monthly cycle. While I have a number of positions set to expire next week, a few of them are not likely to get rolled over, much less assigned. There is, though, some decent chance for some others to be assigned, so I’m hopeful that the upbeat market of the latter half of this week persists into the next week.

Of course that would require continuing to close the day with gains and it has been difficult stringing those kind of days together lately.

While there’s not too much economic news scheduled for next week, there will still be retail earnings and whatever surprises China may still have for us.

I can’t wait.

And by that I mean I can wait and would like to see a nice non-eventful week and one with few, if any, surprises


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:   IP

Puts Closed in order to take profits:  none

Calls Rolled over, taking profits, into the next weekly cycle: ANF, INTC, IP

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 cyclenone

New STO:  BBY (8/21), EMC (10/16)

Put contracts expired: none

Put contracts rolled over: TWTR (1/15/16)

Long term call contracts sold:  none

Calls Assigned: none

Calls Expired:  WY

Puts Assigned:  none

Stock positions Closed to take profits:  TXN

Stock positions Closed to take losses: none

Calls Closed to Take Profits: none

Ex-dividend PositionsAZN (8/12 $0.45), IP (8/12 $0.40)

Ex-dividend Positions Next Week: MRO (8/17 $0.21)

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, AZN, CHK, CLF, FCX, GDX, GM, GPS, HAL, INTC, 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.



Week in Review – August 3 – 7, 2015

 

Option to Profit

Week in Review

 

Aujust 3 – 7, 2015

 

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

 

Weekly Up to Date Performance

August 3 – 7, 2015

It was another weak Friday and now that seems to be the new normal.

What wasn’t normal was that the market was down for the seventh consecutive day to end the week.

This week was simply a continuation of that weekly back and forth pattern that has been the rule for the summer. Nothing of importance really happened this week, but that didn’t stop the market from finding an excuse to add to the gestalt. That gestalt is one of great negativity, even as the market is just 3% away from its highs.

There was a little more trading activity this week, however.

The 2 new positions out-performed both out-performed both the adjusted and unadjusted S&P 500 by 2.9%.

Those positions were 1.6% higher for the week while both the adjusted and unadjusted S&P 500 were down by 1.3%.

Despite continuing weakness in energy and commodities existing positions matched the performance of the broader market. That’s not much, but it’s something.

 With no assignments once again,  the 46 closed lots in 2015 continue to outperform the market. They are an average of 5.0% higher, while the comparable time adjusted S&P 500 average performance has been 1.3% higher. That difference represents a 283.3% performance differential.

Good luck trying to find a way to characterize this week or at least to try and explain what was going on.

It was a week that saw invincible stocks like Disney and Apple head into correction territory, joining so many others in the DJIA.

It still seems so incongruous that so many of those companies could be floundering, yet the indices don’t really reflect that to be the case.

For those who only follow the index levels on the nightly news, they may be in for a big surprise when they open up their monthly statements.

For the first time in a while, however, I could see some silver lining to the week. That’s not the way I typically look at things as I tend to focus on the weakest link of the week. Fortunately, I didn’t do the same with my kids or the people that used to work for me. That would have been pretty unbearable for them.

The weak link this week was that there were no assignments and I am essentially at a zero cash level.

I say “essentially” because I segregate my premium income and funds used for non-OTP trades from OTP spreadsheets, in order to keep numbers “clean” so that comparisons can be more accurately made.

What that means is that if I want to execute any new trades next week I will have to dip into those funds, creating a negative cash balance reflected in the OTP spreadsheets. That would be the equivalent of using margin. However, I’m not recommending that anyone use margin or add funds to their accounts. If anything, I would be seeking to raise cash levels. That’s why the weak link for the week was not seeing enough strength on Friday to see either Abercrombie and Fitch and Intel get assigned. Both were in range on Thursday to become a source for next week’s cash needs.

Otherwise, despite a really bad market environment, with most all metrics being dour, it was a reasonably satisfying week.

Although the new positions weren’t assigned, they were at least rolled over and there was the opportunity to sell some calls on two previously uncovered positions.

That’s something, just not enough.

Next week is another where it is really anyone’s guess. The economic news of late isn’t doing anything to inspire confidence and next week has very little other than the Retail Sales report.

That and the beginning of the stream of retailers who have yet to report their earnings.

I won’t hold my breath, but sooner or later someone has to be getting the money from whatever is being saved on gas prices. My guess is that when it happens it will be Wal-Mart before it will be Nordstroms, for what that’s worth. The problem is that kind of logic would have been wrong for all of 2015, while the logic itself would have been sound all through that same time period.

So next week,  with a handful of positions having their contracts due to expire, I would be more than happy to see my trading confined to just rolling those expiring positions over and would be even happier with an assignment here and there.

Given the back and forth of the market these past weeks, maybe we’re in store for one of those weeks that will take us forward. If that’s going to be the case, the timing would be very nice, but I hope that it could extend into the following week, as well, since that has an equal number of positions set to expire.

Hopefully, the next week will be one where some of those “buy on the dip” people come back into the light and practice their magic while exhibiting their bravery. They’ve been pretty reluctant of late and it’s been rare to see consecutive days with nicely higher moves. But after 7 straight sessions with the DJIA lower, even a single day higher would be a nice change of pace.

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, INTC

Puts Closed in order to take profits:  none

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

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 cyclenone

New STO:  BBY (8/21), EMC (10/16)

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:  none

Stock positions Closed to take losses: none

Calls Closed to Take Profits: none

Ex-dividend PositionsINTC (8/5 $0.24)

Ex-dividend Positions Next Week: AZN (8/12 $0.45)

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, AZN, CHK, CLF, FCX, GDX, GM, GPS, HAL, INTC, 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.