Option to Profit
Week in Review
DECEMBER 21 – 25, 2015
| NEW POSITIONS/STO | NEW STO | ROLLOVERS | CALLS ASSIGNED/PUTS EXPIRED | CALLS EXPIRED/PUTS ASSIGNED | CLOSED | EX-DIVIDEND |
| 0 / 0 | 2 | 1 | 2 / 0 | 1 / 0 | 0 | 0 |
Weekly Up to Date Performance
December 21 – 25, 2015
The week ended with a whimper, but it did its best to undo the damage done during the last 2 days of the previous week and to offset some of the very large losses from the week before that.
This ended up being a week of mostly passive observation and a few opportunities to trade, but once again, there were no new positions opened.
The S&P 500 was 2.7% higher for the week. Existing positions were able to beat that performance by 0.2%, perhaps in part due to some strength in the energy sector.
There were 2 assignments for the week and they added to the nice performance for closed positions this year. Those 77 closed positions, representing the smallest number in 4 years, continue to outperform the market. They are an average of 4.5% higher, while the comparable time adjusted S&P 500 average performance has been 1.0% higher. That difference represents a 362.4% performance differential, as the average holding period has been climbing to nearly 50 days.
This was a week that continued the strange relationship we’ve seen over the past year between the market and energy prices.
This week, however, energy prices went higher for a change and the market followed suit.
There wasn’t very much else that could account for the market’s strong performance for the week, except perhaps what economic news was delivered did nothing to create fears that the economy was heating up too much.
So at least there was nothing for traders to worry about in terms of competition from bonds or the increased costs of borrowing.
With the bottom line going up this week, I suppose that’s all that really matters, but it was another week of very little trading.
With no new positions opened for the week and 2 assignments, there will be a little bit more in the cash reserves as the final trading week of the year gets underway on Monday.
It will be another holiday shortened trading week and my guess is that unless I can see reason to add any new positions fairly early in the week, there will either be little reason to do so, or at least reason to look at the following week’s contracts.
With a fair number of contracts set to expire at the end of the option cycle, I may keep an eye on those to see if there are any opportunities to roll those over early to get some better time diversification and just add some more income in the process.
Next week has only 2 positions expiring, but there are a number of ex-dividend positions, so there will at least be some inherent sources of income for the week.
I don’t think that I’ll be looking too aggressively to add new positions and would be very happen to be able to do next week as was the case this past week. I wouldn’t mind being able to sell some calls on other uncovered positions and am increasingly looking at longer term options in order to do so.
Otherwise, like lots of people, I’ll be happy to see 2015 end, at least as markets are concerned. The dichotomy in performance has really been incredible in how few stocks have actually been the basis for the indexes reaching and still being near record levels.
WHile nothing really changes from December 31st to January 2nd, it’s unusual for consecutive years to be very similar. Most people are pointing to the fact that years in which the market was virtually unchanged are typically followed by strong moves higher.
While I like the volatility that accompanies weaker markets, I wouldn’t mind for the market to be stronger as we begin the new year, but I’d love to see that strength more equally distributed and with some rational reasons behind the moves.
That’s not asking too much, but the mall Santa seemed confused when I asked for it under the tree this year.
Merry Christmas and best wishes for a Happy and Healthy New Year to all.
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: 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: BAC 1/22/16)
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: F, HPE
Put contracts expired: none
Put contracts rolled over: none
Long term call contracts sold: none
Calls Assigned: COH, DOW
Calls Expired: M
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: none
Ex-dividend Positions Next Week: JOY (12/28 $0.01), CY (12/29 $0.11), DOW (12/29 $0.46), EMC (12/30 $0.12)
For the coming week the existing positions have lots that still require the sale of contracts: AGQ, ANF, AZN, BBY, CHK, CLF, COH, CY, FAST, FCX, GDX, GPS, HAL, HPQ, JCP, JOY, KMI, KSS, LVS, M, MCPIQ, MOS, NEM, 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.
