|NEW POSITIONS/STO||NEW STO||ROLLOVERS||CALLS ASSIGNED/PUTS EXPIRED||CALLS EXPIRED/PUTS ASSIGNED||CLOSED|
|3 / 3||0||6||6 / 0||5 / 0||0|
Weekly Up to Date Performance
July 21 – 25, 2014
New purchases for the week beat the unadjusted S&P 500 by 1.4% and surpassed the adjusted index by 1.6%
With 150 of the S&P 500 reporting this week it could have been an exciting one, but instead the market just vacillated day in and day out, barely budging from its starting point, at least until today.
There was some excitement today, but it was the wrong kind, at least for most, even though it turned out fairly well for the overall portfolio.
There were only 3 new positions opened this week and they climbed 1.4% higher while the overall market was virtually unchanged on an unadjusted basis and 0.2% lower on an adjusted basis.
Existing positions significantly out-performed the market for the week by an unusually large 0.5%.
Performance of closed positions continue to out-perform the S&P 500 performance by 1.4%. They were up 3.4% out-performing the market by 70.8%.
Last week, up until Friday, was looking as if it would cap off a disappointing week, particularly compared to the previous week when there was so much trading activity.
This week didn’t have too much trading going on as we headed into Friday, with only two new positions open and no new call contracts written, and only a couple of rollovers. When it was all done, despite having a large drop as the back drop, there were some more rollovers and a number of assignments helping to replenish cash at just the right time.
With the market being basically flat for the week it was actually fortuitous to reclaim some of that cash with the potential to plow it back in without having to deal with across the board higher prices as has been the case the past few weeks as Fridays have closed higher.
It was even more fortuitous that with the large decline seen on Friday the walls didn’t come tumbling down and turning those assignments into expirations.
Instead, it ended up being another good week from a number of perspectives.
But first, the negatives:
There were 5 covered positions that expired without getting rolled over. While I expect that for DOH trades, such as in HFC where the premiums are usually pretty slim and you don’t want to cannibalize the gains through unnecessary commission and buyback expenses, with volatility so low it’s also sometimes difficult to justify the rollover of other positions, such as Lorillard.
Also, no new STO trades were made for the week. That means the idle are still idle. I prefer to see them all working. Otherwise, they’re just stocks.
Now, for the positives.
While only 3 new positions, and one of them just today, they at least performed well. As usual, when there are so few positions to consider, whether they did well or not, you have to ascribe most of that to luck. This time we were lucky.
The existing positions significantly outperformed the market. Most often that’s the case when being able to do lots of rollovers. This time around there were some of those, but there was also price appreciation relative to the overall market.
For me, the best news were the assignments. Actually the best news was the bottom line, but I’m trying not to sound crass.
With prices ending the day near their lows that opens the potential opportunity to have some cash to spend next week at levels other than new highs, especially if there’s some further weakness or even a flat market to open the week.
Next week begins with a moderate number of positions set to expire on Friday. However, that number is not so great that more couldn’t be added to that list, as well as considering the use of some expanded weekly offerings.
With a nice boost to cash reserves I’m also less reluctant to consider new positions, especially with some price drops today. Even with some mild upside to begin the week there still may be some relative bargains to consider.
Among them may even be positions, such as Dow Chemical and eBay, which were assigned today. I especially like seeing some assignments right near their strike prices begin the next week below those prices. It has been quite a while since that has been the case, but in a market that isn’t simply going straight higher, that’s actually a fairly common occurrence and is the source for the accumulation of returns.
For now, it just feels good to have dodged a potential bullet today. Sometimes that luck that I think is so important is also about the timing of the market’s moves. For us the timing of a drop like today’s turned out to be very fortuitous, just as last Friday’s nice gains were perfectly timed.
Can’t remotely take credit for that sort of thing, but it’s occasionally nice to be on the right side of randomness.
(Note: Duplicate mention of positions reflects different priced lots):
New Positions Opened: BBY, GM, LVS
Puts Closed in order to take profits: none
Calls Rolled over, taking profits, into the next weekly cycle: KSS, GPS, RIG, RIG
Calls Rolled over, taking profits, into extended weekly cycle: EBAY (8/8)
Calls Rolled over, taking profits, into the monthly cycle: DG
Calls Rolled Over, taking profits, into a future monthly cycle: none
Calls Rolled Up, taking net profits into same cycle: none
New STO: none
Put contracts expired: none
Put contract rolled over: none
Long term call contracts sold: none
Calls Assigned: BBY, DOW, EBAY, HFC, JPM, LVS
Calls Expired: FDO, FDO, GPS, HFC, LO
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 (7/21 $0.25)
Ex-dividend Positions Next Week: C (7/30 $0.01)
For the coming week the existing positions have lots that still require the sale of contracts: AGQ, BMY, C, CLF, COH, FCX, FDO, GPS, HFC, JCP, LULU, MCP, MOS, NEM, PBR , RIG, TGT, WFM, WLT (See “Weekly Performance” spreadsheet or PDF file)
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