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
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 cycle: none
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 Positions: INTC (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.