Option to Profit
Week in Review
July 13 – 17, 2015
|NEW POSITIONS/STO||NEW STO||ROLLOVERS||CALLS ASSIGNED/PUTS EXPIRED||CALLS EXPIRED/PUTS ASSIGNED||CLOSED||EX-DIVIDEND|
|0 / 0||1||0||0 / 0||3 / 0||0||1|
Weekly Up to Date Performance
Despite Friday’s mild weakness, the market had one of its best weeks in a long time, as long as you weren’t in energy and materials, which continued weak for the the fourth consecutive week.
There was little reason to go chasing new positions this week and it turned out to be another week of no new purchases and almost no activity, otherwise.
The S&P 500 was an incredible 2.4% higher for the week, significantly out-performing the DJIA, while the NASDAQ 100 hit all time highs. Considering that just 2 weeks ago we were about to test technical support levels as the S&P 500 was 5% lower, the performance this week was very impressive, even if it really was limited to a single day.
Existing positions, over-invested in energy stocks, which were again down heavily this week again lagged the general market this week.
With no assignments for the week, 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.
There was a lot going on this past week, but most of the gains for the week came on Monday as China didn’t melt down over the weekend and there appeared to be an agreement over the near term resolution of the Greek debt crisis.
Those two events, or actually one event and one non-event helped the market get most of its gain for the week shortly after the opening bell rang on Monday morning.
For now, Greece does appear to be resolved, although China is still something that could give markets reason to soar to new highs or make us wonder why it ever bounced back so decisively from it’s technical support at the 2046 level on the S&P 500.
There was a big divergence among the 3 major indexes this week as the NASDAQ was 4.2% higher, no small thanks to Google. At the same time the DJIA lagged, but was still 1.8% higher, while the S&P 500 was 2.4% higher.
Once Monday came and went, the rest of the week was itself a non-event, even with 2 days of Janet Yellen testimony to serve as a potential launching pad.
On the whole, as earnings have started coming in they have been positive, which should have been expected as the bar was set fairly low during the previous quarter’s earnings and forward guidance. The coming week has much more earnings reports in store and in a wide range of important companies. Their experience over the past 3 months can also give us some better idea of what the impact of currency exchange and lower energy prices had on their results and may give us an idea of what may be in store over the next quarter.
With international events possibly going quiet for a short while, the next couple of weeks may be able to focus on earnings fundamentals and maybe another round of speculation over a re-strengthening dollar and a newly re-weakened energy sector.
Not having spent any cash this past week and not having had any assignments leaves me in a position that isn’t very anxious to look for new positions. Certainly, there’s difficulty in justifying adding positions as the market again is nearing its previous highs.
As next week marks the beginning of the AUgust 2015 option cycle and having no positions set to expire next week, the greatest likelihood is that if I do make any new purchases they will be with a very short time frame in mind, as was the case 2 weeks ago. The intention would be to get a quick return from premium and hopefully see the positions assigned, or at the very least in a position top be rolled over.
With volatility heading even lower, there is less and less desire to rollover positions as the relative cost of closing out a position is just too high compared to the additional premium received.
While I don’t like to see positions xpire without having a replacemt call option sold, latelythere is very little justification in doing the rollovers and most stocks are also giving very little reason to look at longer term options unless there is an intervening earnings report to prop up the premium.
At this point I expect next week to be another quiet one in terms of personal trading.
While I’d like to see volatility increase, as it had been doing less than 2 weeks ago, as we do approach the all time highs, I would prefer seeing those resistance points tested and the market surpassing them, even if at the expense of volatility and option premiums.
WIth that happening and perhaps the realization that a deal with Iran won’t swamp oil markets with excess product for quite a while, perhaps energy prices could get back on track at the same time that the market tests those highs, maybe even being the impetus for those highs.
I wouldn’t mind going along for those rides.
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: 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: LVS (8/21)
Put contracts expired: none
Put contracts rolled over: none
Long term call contracts sold: none
Calls Assigned: none
Calls Expired: GDX, GM, KSS
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: FCX (7/13 $0.05)
Ex-dividend Positions Next Week: FAST (7/29 $0.28)
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.