|NEW POSITIONS/STO||NEW STO||ROLLOVERS||CALLS ASSIGNED/PUTS EXPIRED||CALLS EXPIRED/PUTS ASSIGNED||CLOSED|
|2 / 3||3||3||3 / 0||0 / 0||0|
Weekly Up to Date Performance
February 9 – 13, 2015
Finally, a week with a little of everything.
New positions trailed the unadjusted S&P 500 by 0.2% for the week and the adjusted index by 0.3%.
Despite being 1.8% higher for the week the covered positions placed a limit on their gains as the unadjusted S&P 500 finished 2.0% higher and the adjusted S&P 500 finished 2.1% higher, as the S&P 500 set a new record close
Existing positions were 2.4% higher for the week, beating the broader market by 0.4% on the week, which has been the trend thus far in 2015. While it’s relatively easy to beat the broad market during a week when the market itself isn’t performing well, it’s especially nice to do so when the market has had a substantial gain.
With 3 assigned positions this week the total number for 2015 is still small as compared to previous year at the same point. Thus far the positions closed in 2015 are an average of 4.6% higher, while the comparable time adjusted S&P 500 average performance has been only 1.7% higher. That 2.9% difference represents a 164.6% performance differential that is very unlikely to be maintained through the year.
Most weeks, even when assets have climbed nicely I find something that I’m unhappy about.
Lately it has been related to the reduced trading activity and a dwindling cash reserve as assignments have been few and the income stream has been less than I would like to see.
This week I was pretty happy, although I would have liked to have been able to rollover Microsoft to also get its dividend next week, but that’s better than having one of those weeks sitting around and waiting for an opportunity and nothing ever gets to unfold.
The final bottom line for the week also helped to ease the dividend that got away, but the process was just better this week, as well.
This week was still a far cry from opening the number of new weekly positions as was the case through much of 2013 and 2014, but if anything is obvious, 2015 is not 2013 nor 2014.
What it may be is another 2011, as markets have been going up and down or a really regular basis and in having exerted so much energy since the beginning of the year is now back to where it ended 2014.
That represents a lot of effort for not having gone anywhere and that was precisely what 2011 was all about as the S&P 500 finished unchanged for the year, but not without lots of gyrations and large moves from day to day.
If 2015 will represent a return to that kind of a market instead of being one that simply goes higher in a straight line, then there will be far less opening of new positions and far more rollovers, instead.
The longer you’ve done this sort of thing the more those rollovers have their appeal and the more consistently those returns can accumulate even if the stock has ended up doing very little on a net basis, just as long as it puts in the effort in-between.
The rollover of the Gold Miners ETC (GDX) puts was an example of taking a position that was heading toward its end and trying to breathe additional life into it by rolling it over rather than seeing it leave the portfolio.
That’s what I had wanted to do with Microsoft and that’s the sort of thing that you can find yourself doing more and more, especially when the forward weeks premiums reflect more volatility than the expiring week’s premiums. In those cases the near week sees erosion of its premium at a faster rate than the forward week and it may make sense to do the rollover rather than take the assignment of a call or the expiration of a put.
That also hasn’t really been the case since 2011 and early 2012. It also wasn’t the case with Microsoft today.
There’s actually something nice about having an in the money position reward you with an enhanced premium and without the need for an event, such as earnings, to be necessary for that enhancement. When it does occur there’s reason to keep the position going and going.
It’s also nice to see that even if one of those in the money stocks falls it may not be as bad as it is for others. You may even find yourself rooting for a price drop to get it closer to the strike price so that you can get to play all over again.
Withh lots of positions set to expire next week and with some replenishment of the cash reserves I may be a little less miserly in adding new positions. However, with only a 4 day trading week and not really wanting to add to the number of positions set to expire on a single day, I’m likely to look beyond next week and into the March 2015 cycle when writing contracts.
That’s especially true as at the moment a number of next week’s positions are in decent position themselves to either be assigned or rolled over.
Either way, I’d be happy to see some more positions taken off the books or at least be fruitful members of the portfolio and take advantage of what I hope will continue being an up and down market
(Note: Duplicate mention of positions reflects different priced lots):
New Positions Opened: ATVI, GDX (puts), MSFT
Puts Closed in order to take profits: none
Calls Rolled over, taking profits, into the next weekly cycle: GDX, GDX (puts)
Calls Rolled over, taking profits, into extended weekly cycle: GPS (3/7)
Calls Rolled over, taking profits, into the monthly cycle: none
Calls Rolled Over, taking profits, into a future monthly cycle: none
Calls Rolled Up, taking net profits into same cycle: none
New STO: BP (3/20), DOW (3/20), LVS (2/27)
Put contracts expired: none (some may have chosen to let GDX put expire rather than to rollover)
Put contracts rolled over: GDX
Long term call contracts sold: none
Calls Assigned: ATVI, MET, MSFT
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: BP (2/11 $0.60)
Ex-dividend Positions Next Week: MAT (2/17 $0.38), RIG (2/18 $0.75), AZN (2/18 $1.88)
For the coming week the existing positions have lots that still require the sale of contracts: AGQ, ANF, CHK, CLF, COH, FCX, HAL, HFC, .INTC, JCP, JOY, LVS, MAT, MCP, MOS, NEM, RIG, SBGI, WFM, WLT (See “Weekly Performance” spreadsheet or PDF file)
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