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Sunday, June 14, 2015

Weekend Portfolio Analysis (June 14, 2015)

Good morning Lazy Traders of the world. Today I'm writing to you from sunny North Miami Beach, Florida.
It's been a pretty hectic weekend moving from old Hollywood, FL to North Miami Beach and as anticipated it was not possible to deliver the Weekend Portfolio Analysis on Saturday as usual. But now the magic of the Internet is invading my apartment. It is time to stop the marketing nonsense and get down to it.

Market conditions
There was weakness early in the week and we almost reached a short term oversold condition. On Tuesday the SPX rebounded right off the lower end of the long term uptrend channel. To the penny. You know, just to proof that the markets are random (sarcastic). For the record, I haven't redrawn those lines in more than a year.

(Click on image to enlarge)
Stochastics: 61 (neutral)
McClellan: -79 (neutral)
Number of Stocks above their 20 Day Moving Average: 50% (neutral)

From an almost oversold condition we went back to no man's land. Not the greatest time for selling individual credit spreads. In the end I didn't trade last week as the market did not reach the perfect extreme (Number of stocks above their 20 DMA kept hovering around 40%). Yes, I'm being very picky with my entries this year, I know. But a back-tested system is a back-tested system. Now, had we been in a historically stronger period, like November - January, I would have sold Credit Put spreads on Tuesday. Having two of the three elements in oversold territory would have been enough for me to sell Puts during the strongest period of the year, but not entering the summer with the weakest months of the year ahead. In retrospective, it was a pity: the 1820/1825 August Credit Put spread reached 90% probability of success at one point. Could have been a good play. But no regrets. Being disciplined following a system is key and if the market didn't reach the complete oversold condition, it means it rebounded, which at the same time means my Iron Condor positions didn't get any heat and are making me more money. So, all is good.

June positions
RUT 1130/1140/1340/1350 unbalanced Iron Condor
Will expire without problems this week. 99.90% probability of success (isn't TOS funny at times?). The performance of the overall portfolio will improve to +13.82% for the year, with 6 more months ahead. Not too bad for zero sleepless nights and very little effort this year.

July positions
SPX 1935/1940/2220/2225 unbalanced Iron Condor
88% probability of success and 5 weeks to expiration. With SPX sitting at 2094 I am not concerned about this position. Sleeping like a baby.

Action plan for the week
The RUT June Iron Condor will expire on Saturday morning. The July SPX Iron Condor will not reach adjustment points this week.

As for new positions, I'm not done with the July cycle yet. If we reach an extreme, July will be my go to cycle. On the way down the plan is the same, with SPX falling to around 2070, I would gladly sell the 1900/1895 Credit Put spread for 0.30 credit or better. To the upside, I'm willing to sell RUT July Calls above 1340 in the event that Russell makes a new all time high and hits 1285 - 1290. As usual, I would sell the 10 point wide Call spreads in RUT, expecting no less than 1.00 credit.

And as for August, still a little far for my liking. I'll start planning August positions in two weeks.

Long term Investing
Finally this week I purchased 42 shares of Potash Corp Of Saskatchewan at $37.62 Canadian Dollars. This gem is looking decently undervalued according to its own historical metrics:

Taken from
POT is currently rated 4/5 by Morning Star and it is offering a very attractive 5.02% dividend yield as I write this.

I now own a total of 127 shares of Potash which have been paying me dividends for two years. The first purchase was this one, in October of 2013. POT has a policy of increasing dividends every year to reward shareholders which has been taken more seriously in the last five years with a spectacular Dividend 5 year Growth rate of 60.86%.

For more information visit CanadaStockChannel
Potash Corp of Saskatchewan was featured in my Invest and Retire before you die series in case you want to know more about the company and its historical performance.

With this purchase I have officially maxed out my TFSA account, and because I don't reside in Canada anymore, I will not accumulate anymore contribution room. So, the next purchases will be the result of cash accumulation via dividends or free capital I get as a result of selling other holdings in the account.

Economic Calendar
Monday: ECB President Draghi speaks
Tuesday: German ZEW Economic Sentiment. USA Building Permits and Housing Starts.
Wednesday: Europe's CPI. FOMC Minutes.
Thursday: USA Core CPI, Philly Fed Index

Good luck this week folks! Be Lazy. Do not let commissions kill you. Do not over trade. Do not over adjust your positions. See ya!!

Check out 2015 Track record

Go to the bottom of this page in order to see the Legal Stuff


  1. Last week:
    On Tuesday, the delta of SPX July 2225 calls was hovering around one. The 2225/2245 ccs no longer provided an effective hedge for the 1880/1900 cps. I closed all five SPX July 2225/2245 ccs that I originally sold for 1.55. I bought them back for 0.15 for a total profit of $700. This turned the SPX iron condor spreads into SPX credit put spreads.

    Open positions:
    5x SPX July 1880/1900 credit put spreads
    5x RUT July 1100/1120/1320/1340 iron condor

    Next week:
    I am planning to open a new iron condor speads with August expiration in SPX. Unless, SPX gaps up or down on Monday, I am thinking about a balanced IC SPX Aug 1860/1880/2210/2230. Plus, I will monitor my open positions. On Wednesday, there is a regular FOMC meeting so we may see some volatility in the market.

    Good trading,

    1. Hi Martin,

      Thanks for sharing your ideas especially your candidate new positions. Your July positions look good to me. Yes thee is a FOMC minutes on Wednesday as I pointed out as well in the Economic Calendar section. But thanks for mentioning it. Volatility could/should increase prior to the meeting which could provide with a little bit more edge for selling options.


  2. It was another boring and profitable week. We almost had an oversold condition on SPX last Tuesday but it never got low enough to trigger the signal to sell credit put spreads. I closed the RUT July 17th 1050/1040 cps for .10 debit on Wednesday.

    All of the current positions continue to do well and are profitable in this range bound environment. Iron condor sellers are looking like geniuses this year.

    For next week, if we are still in no man's land, I will sell some more iron condor.

    Current positions:

    IWM August 21st 105/103 cps – currently profitable
    SPX August 31st 1750/1725 & 2275/2300 iron condor – currently profitable
    RUT September 30th 1000/990 & 1380/1390 iron condor - currently profitable
    SPX September 30th 1725/1700 & 2275/2300 iron condor - currently profitable

    1. Easy win on that RUT July 17th 1050/1040 cps Jonathan. You have some nice and comfortable positions going. I'll be looking forward to your potential new Iron Condors.
      Thanks for sharing,