Weekly Update: February 26, 2015

| February 26, 2015

Weekly Update:  February 26, 2015


What To Watch

US equities continue to flirt with new record highs and volatility has softened. Investors are apparently less concerned about a big selloff with the S&P 500 finally breaking out to the upside these past couple weeks.

The S&P 500 is up about 3% on the year and hasn’t had a big down day in several weeks. Despite global economic risk, investors are starting to feel less concerned. As of yet, most of the biggest global issues have not exploded into crisis level incidents.

Greece received an extension of its support by the ECB, and could be headed to calmer days. Ukraine and Russia are attempting to work out a peace agreement. And, European economic news hasn’t been quite as awful as expected.

US economic news has been a bit worse of late, but the Fed still believes the economy is performing well. They aren’t in a hurry to raise rates, however. Consumer confidence has slid a little bit lately, but overall, there are no major red flags to worry about.

Let’s take a look at our positions.


Portfolio Recap

Position #1: Pandora Media (P) March 17 Calls

Price Paid: $1.33

Current Price: $0.25

Time Until Expiration: 22 days

P has continued to move sideways, and I don’t expect much until expiration. As I’ve said before, I don’t expect any of you to still be holding this position.


Position #2: Red Hat (RHT) March 65 Puts

Price Paid: $2.10

Current Price: $0.35

Time Until Expiration: 22 days

RHT has continued to climb towards new highs. That’s unfortunate for us, as it hit our aggressive risk-control point. While the position did serve a hedge against the rest of our long portfolio, it certainly would have been nice to see it gain some value. With everyone out of this position, I will no longer be updating it here.


Position #3: Overstock.com (OSTK) March 22.50 Calls

Price Paid: $1.35

Current Price: $1.45

Time Until Expiration: 22 days

OSTK has moved into winning territory for us with three weeks still to go on these options. The good news is the Internet sector hasn’t kept pace with the NASDAQ overall. So, we could be in for a much higher move, especially if the stock breaks through the 50-day moving average just above where it sits now.


Position #4: Intel (INTC) April 34 Calls

Price Paid: $1.25

Current Price: $0.97

Time Until Expiration: 50 days

We just made this trade yesterday and it’s down a little on the first day. No big deal as we have these calls for another 50 days. Stay tuned.


Category: OTW Weekly Updates