Option to Profit
Week in Review
DECEMBER 7 – 11, 2015
| NEW POSITIONS/STO | NEW STO | ROLLOVERS | CALLS ASSIGNED/PUTS EXPIRED | CALLS EXPIRED/PUTS ASSIGNED | CLOSED | EX-DIVIDEND |
| 0 / 0 | 0 | 3 | 0 / 1 | 0 / 0 | 0 | 6 |
Weekly Up to Date Performance
December 7 – 11, 2015
What a week to have avoided.
As opposed to last week that saw lots of large individual day moves but no net change. this week saw large moves and a big net change.
Only the net change was in the wrong direction.
I couldn’t find a single time during the course of the week that I could justify opening any new positions.
With the market down 3.8% on the week after its single worst declining day in about 3 months, there was nothing good to be said.
Unless you think in relative terms.
In relative terms, although existing positions lost 2.2% on the week, they still out-performed the broader market by 1.6%, despite continuing weakness in energy and commodities.
Thanks to the expiration of some short put positions, there are now 75 closed positions for the year and they continue to outperform the market. They are an average of 4.6% higher, while the comparable time adjusted S&P 500 average performance has been 1.0% higher. That difference represents a 358.7% performance differential.
There really was no news to account for this week’s horrible action.
The predominant theme for the week was selling and then the quick dashing of any hopes when it appeared as if the selling might abate.
After 4 days of varied disappointment that already had the market almost 2% lower, came Friday and an additional 2% decline.
That now brings the market to a point that is about 6% below its all time highs seen just 4 months ago.
While this was a pretty miserable week, there was at least some good to come out of it.
Maybe the first bit of good news was that no new money was put to work for the week, because there weren’t very many new positions that would have survived this week.
I just had a bad feeling all week and it never seemed to get any better. Sometimes it pays to resist bargains, but there was absolutely no reason to think that this week would have been a week to have will power.
There was some more good news, though.
Somehow, no positions set to expire this week did so without being rolled over. The exception was Seagate Technology, but when you sell puts, you like to see those expire. After a few weeks of rolling those puts over it was nice to see the shares maintain relative strength to end the week and allow those puts to expire, thus adding some cash to the reserve to begin the coming week.
While I usually wait until Friday to try rolling over positions, there was a bit of luck that allowed rollovers to be done on Thursday when the market was at its peak for the day. Together with 6 ex-dividend positions those 3 rollovers helped create the week’s income stream, considering that there were no new positions to do so.
It’s hard to call that good fortune anything other than luck.
Next week will be the long awaited FOMC meeting that everyone believes will finally bring an announcement of an interest rate hike.
The Janet Yellen press conference afterward will probably be far more important as far as markets will go.
With a fair number of positions set to expire next week and with Wednesday being a big day, I may look to rollover those positions in the event of a sharp climb higher in advance of the FOMC release.
Otherwise, unless there is something really compelling, I don’t see much reason to think about adding many, if any new positions next week either.
The difference next week, though, is that there is only a single ex-dividend position to generate some income and at the moment the rollover prospects are not looking very good, so I may be looking a little more critically for some bargains.
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: BBBY, WMT
Calls Rolled over, taking profits, into extended weekly cycle: BAC (12/24)
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: none
Put contracts expired: STX
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: KSS (12/7 $0.45), HPE (12/7 $0.06), HPQ (12/7 $0.12), BBY (12/8 $0.23), NEM (12/9 $0.025), M (12/11 $0.36)
Ex-dividend Positions Next Week: LVS (12/18 $0.65)
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, JCP, JOY, KMI, KSS, LVS, 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.
