Weekly Update: August 25, 2016

| August 25, 2016

Weekly Update:  August 25, 2016


What To Watch

It’s been an interesting week in the sense that nothing all that interesting has happened.  As we approach September, you’d probably think there would be more meaningful news out.  However, it’s been much of the same… and markets have reflected this by doing not much of anything.

Perhaps we’ll get some action next week after news starts flowing out from the Fed shindig at Jackson Hole.  Will rates go up soon?  Will we need more QE?  What about inflation?  These are questions that may get addressed during this typically newsworthy get together.

In the meantime, stock indexes keep hovering near all time highs.  Oil has rebounded slightly.  And, precious metals continue to be top performers in terms of year-to-date performance.

There seems to be a ton of volatility sellers out there right now.  While, it’s a good way to make money in the long-run, I caution against it while volatility levels are at such low levels… there’s basically only one direction it can go from here.  In fact, it’s a really good time to hedge your portfolio, with option prices so cheap.

Let’s take a look at our positions.


Portfolio Recap

Position #1: Cameco (CCJ) September 10 Calls

Price Paid: $0.75

Time Until Expiration: 22 days

Pretty much an uneventful week for uranium.


Position #2: Gilead Sciences (GILD) September 85 Calls

Price Paid: $0.77

Time Until Expiration: 22 days

GILD is still trying to break through key resistance levels (at the 50-day moving average).  It didn’t happen this past week, but there are still 3 weeks for the stock to make a significant run higher.  Getting through that 50-day line is going to be huge.


Position #3: 3D Systems (DDD) September 15 Puts

Price Paid: $0.97

Time Until Expiration: 22 days

DDD is heading higher, which is fine since this is basically a hedge against our other positions, which are all of the bullish variety.


Position #4: Cisco Systems (CSCO) October 30 Calls

Price Paid: $0.98

Time Until Expiration: 57 days

We’re off to a solid start with the CSCO calls.  The stock has slowly moved higher since our call purchase, and we’re just below our first exit point for conservative profit-taking.  Right now, the peak gains are sitting at 66%.


Position #5: Himax Technologies (HIMX) October 10 Calls

Price Paid: $0.60

Time Until Expiration: 57 days

We just made this trade yesterday, so nothing really to report right now.  We have almost 2 full months on these October options, so plenty of time to for the trade to work.


Category: OTW Weekly Updates