| NEW POSITIONS/STO | NEW STO | ROLLOVERS | CALLS ASSIGNED/PUTS EXPIRED | CALLS EXPIRED/PUTS ASSIGNED | CLOSED |
| 4 / 4 | 10 | 4 | 10 / 1 | 3 / 0 | 0 |
Weekly Up to Date Performance
March 17 – 21, 2014
New purchases beat the time adjusted and unadjusted S&P 500 this week by 0.4% and 0.1%, respectively, during a week that almost pulled out yet another new high and actually set an intra-day high on Friday.
The market showed an adjusted gain for the week of 1.1%% and unadjusted gain of 1.4% for the week, while new positions gained 1.5%.
For positions positions closed in 2014, performance exceeded that of the S&P 500 by 1.6%. They were up 3.6% out-performing the market by 86.2%.
With events overseas quiet for now the week’s only real story was what a word here or a word there actually meant during a press conference.
Did she mean what she said? Did she mean to say what she said?
Whatever the truth behind the words that caused the market to tumble the reaction was short lived and did nothing to keep the market from setting another intra-day trading record on the S&P 500.
Unbelievable.
While today faltered after looking like it might end up being another triple digit gain it was another in a series of strong weeks in the market. It’s just that this one wasn’t exactly expected to be that way and showerd great ability to recover, while at the same time showing great susceptibility to nerves.
It was also another week that I didn’t open very many new positions and for a change there wasn’t much in the way of new ex-dividend positions, but it was an active one for finding new cover on unprotected positions and in rolling over positions.
Also, if you’re on the same page as I and are trying to reduce the total number of holdings, this a was a good week for that as there were 10 assignments and one put expiration, which will also lead to a significant rise in cash reserves to begin the next monthly option cycle.
With a flat day to close the week that at least means that I won’t have to be looked at even greater inflated prices when charting out a course for the coming week.
While it’s nice to have money to spend and maybe even positions upon which to place some faith, I may spend more time thinking about how to put existing committed assets to work rather than on how to add to the number of workers.
As this week wore on I have decided to engage in some more aggressive trading on my own behalf and will likely include some of those trades in coming Trading Alerts rather than simply reporting on personal trades.
Before you think I’ve lost my cautionary perspective the nature of those trades is such as with the Marathon (MRO) option trade this afternoon, which is nothing more than a variant of DOH trading.
Instead of passively waiting for near, but out of the money positions to get to a point that it seems to make sense to sell calls, I’m returning to some of my roots and want to more aggressively try and capture options whenever there is something to be grabbed.
Doing so has to come with the realization that sometimes you will need to buy back the options, occasionally at a loss, in order to continue participating in the good fortunes of a stock. That also means that existing positions may require greater maintenance and attention.
Back in the days before I shared this approach I did a fair amount of this kind of aggressive trading, including simply going after “crumbs,” in anticipation that a few more cents could be obtained with a single day or two, or sometimes just a few hours of an option contract.
The “crumbs” kind of trades are not something that I will likely broadcast, however, as they represent a skewed risk/reward proposition. They offer very little reward for the risk encountered, since the real risk is rolling over to that same or slightly higher strike price that may really put you behind if the shares continue going higher and higher in the coming time period.
On the other hand, the variation of the DOH strategy is pursued in the same neighborhood of a share’s costs and can still result in a nice outcome even if shares soar beyond the strike price selected, by simply rolling over to what may have become a deep in the money strike.
As with most option related strategies it is the volatility that makes one plausible one moment but less plausible the next. This week has been one of spikes and reversals in prices and volatility so there have been occasional, but fleeting moments of opportunity.
Ultimately, the idea is not to take on more risk but rather to put stocks to work more than they have been asked to do.
If you like trading and you like money don’t be surprised if there are more alerts along the lines of the Marathon trade and maybe even an occasional crumbs trade, if I have a lapse in discretion and the ability to assess risk and reward relative to one another.
Add those to also seeing some more suggestions to consider the sale of puts, as mentioned recently, even when not associated with earnings or some other event.
I’ve used those more than I can recall in past years and have, buy and large, been satisfied with their performance enough to want to share, where appropriate.
This week’s details may be seen in the Weekly Performance spreadsheet * or in the PDF file, as well as as in the summary.below
(Note: Duplicate mention of positions reflects different priced lots):
New Positions Opened: BBY, COH, GM, TMUS
Puts Closed in order to take profits: none
Calls Rolled over, taking profits, into the next weekly cycle: APC, FDO, WFM
Calls Rolled over, taking profits, into extended weekly cycle: none
Calls Rolled over, taking profits, into the monthly cycle: RIG
Calls Rolled Over, taking profits, into a future monthly cycle: none
Calls Rolled Up, taking net profits into same cycle: none
New STO: AIG, APC, C, C, COP, DRI, FDO, LULU, MRO, VZ
Put contracts sold and still open: none
Put contracts expired: TWTR
Put contract rolled over: none
Long term call contracts sold: none
Calls Assigned: ANF, BBY, COH, FAST, HFC, INTC, LB, LB, MSFT, TMUS
Calls Expired: CHK, GM, LULU
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: BBY (3/18 $0.17)
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For the coming week the existing positions have lots that still require the sale of contracts: AGQ, CHK, CSCO, CLF, FCX, GM, IP, JCP, LULU, MCP, MOS, NEM, PBR, PM, RIG, WLT, WY (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.
