Option to Profit
Week in Review
June 8 – 12, 2015
|NEW POSITIONS/STO||NEW STO||ROLLOVERS||CALLS ASSIGNED/PUTS EXPIRED||CALLS EXPIRED/PUTS ASSIGNED||CLOSED||EX-DIVIDEND|
|0 / 0||1||1||1 / 0||1 / 0||0||5|
Weekly Up to Date Performance
June 8 – 12, 2015
This was another abysmal kind of week made even more so by the lack of any proactive trading activity.
There were again no new positions opened for the week as there were absolutely no signs of anything good to make one want to commit money.
Even the brief surge higher was mostly erased as the week came to an end.
The S&P 500 ended the week 0.1% higher. Not very interesting until you dig down for the details.
There was, however, one assignment for the week. The 41 closed lots continue to out-perform the market. They are an average of 5.1% higher, while the comparable time adjusted S&P 500 average performance has been 1.3% higher. That 3.7% difference represents a 279.8% performance differential.
This was the third week in a row with relatively little news but with some big market moves.
This week certainly had its share of moves in both directions, moving higher and lower ostensibly on the basis of the promise and then the disappointment of achieving some resolution on the Greek crisis.
While stock markets were confused about what to do, so, too, were bond markets, but the trend there is as deniable as it has been in the stock market.
Stocks have been having a difficult time finding any reason to challenge recently set record highs and bond markets are having a hard time resisting the idea that interest rates will be going higher soon.
Just how soon may become more clear in the coming week as the FOMC Statement will be released on Wednesday, just 2 days before the end of the monthly option cycle.
I never really like that kind of timing, especially with lots of positions set to expire so soon after what may really be a consequential market move as a result of the FOMC.
I was hoping to possibly get some rollovers of next week’s expiring positions in order to minimize the impact of a really adverse reaction to anything that might be contained in the release.
But this just wasn’t the week for any trading. There definitely was little demand on the buying side for call options as the sentiment is far from optimistic and the market is definitely falling prey to worries and technical factors.
What’s really needed at this point is to get over the fears of an increase in interest rates and move on with life as usual. We’ve been held hostage a number of times during the course of 2015 by worries that the increase was imminent. Each time when it became clear that there wasn’t going to be an increase, the market rallied. Now it’s likely to rally after the increase becomes reality, as there isn’t too much reason to believe that they will be put off much longer.
This time, however it appears that there may be reasons to believe that things are really slowly heating up as varied economic reports are finally not in conflict with one another. Although that heat may now, in and of itself, not be enough to warrant an increase in rates using historical standards, these have been far from historical times and would be a good opportunity to get a practice rate hike in for when it may really be needed in the future.
Next week, with still very little cash to make any new purchases and with lots of expiring positions, my focus has to be on trying to get whatever assignments and rollovers possible, with very little concern about making any new purchases.
The one positive for the week was that it was another week with lots of positions going ex-dividend, While I’ve been wanting to accumulate those positions lately, I’m glad that I didn’t bite on any of this past week’s potential dividend plays, as they were uniformly hit hard after their ex-dividend dates as the market weakness was non-discriminatory as the week came to its end.
Still, with all of this negativity, the market is barely down 2%. However, until we do get over the fear of an interest rate increase or until the next earnings season begins and perhaps gives us some upside surprises, there’s not too much reason to go on a spending spree.
Although it won’t be a week of reckless spending, I do hope that there will be plenty of trades to be made and as early in the week as opportunities may present themselves.
(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: none
Calls Rolled over, taking profits, into the monthly cycle: none
Calls Rolled Over, taking profits, into a future monthly cycle: GDX (7/17)
Calls Rolled Up, taking net profits into same cycle: none
New STO: WY
Put contracts expired: none
Put contracts rolled over: none
Long term call contracts sold: none
Calls Assigned: GM
Calls Expired: AZN
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: GM (6/8 $0.36), KSS (6/8 $0.45), BBY (6/9 $0.23), NEM (6/9 $0.025), KO 6/11 $0.33)
Ex-dividend Positions Next Week: LVS (6/18 $0.60)
For the coming week the existing positions have lots that still require the sale of contracts: AGQ, ANF, AZN, CHK, CLF, FAST, FCX, HAL, .INTC, JCP, JOY, LVS, MCP, MOS, MRO, RIG, WFM, WLT, WY(See “Weekly Performance” spreadsheet or PDF file)
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