Weekly Update: July 11, 2014

| July 11, 2014

Weekly Update:  July 11, 2014


What To Watch

We had a little bit of an unexpected scare this week with a major bank in Portugal missing a bond payment. It briefly sent stocks tumbling on renewed concerns over Europe’s recovery. For the most part, things have settled down. But it just goes to show you how international issues can quickly spook investors.

As I’ve mentioned before, international risk is about the only thing that could derail the impressive bull rally we’ve been experiencing. Even after the Portugal scare, the S&P 500 is only down about a percent from last week.

Domestic news continues to be mostly strong, especially in regard to the job market. Jobless claims came in at 304,000. That’s well below expectations and one of the lowest readings since 2009. If the job market continues to improve at this rate, the economy is going to be in much better shape moving forward.

Most of our July options are still in play with expiration coming next week, so keep an eye out for sell alerts. We’re also going to add a new position on Monday or Tuesday, depending on market conditions. As always, stay tuned!


Portfolio Recap

Position #1: Target (TGT) July $60 Calls

Price Paid: $0.94

Current Price: $0.45

Time Until Expiration: 7 days

TGT is trading exactly at our strike price and our options are about half what we paid for them with a week to go. Basically, we’ll sell on the next up move. Keep in mind, even a 50-cent move in the stock could be enough for us to get back to even, or higher.


Position #2: Medallion Financial (TAXI) July $12.50 Calls

Price Paid: $1.20

Current Price: $0.00

Time Until Expiration: 7 days

TAXI pulled back hard before it had a chance to make a real run for us. Most likely, these options will expire worthless. It’s a shame because this is actually a very good stock and should be fine in the long-term.


Position #3: THL Credit (TCRD) July $12.50 Calls

Price Paid: $1.05

Price Sold: $1.35

We sold TCRD last week for 28.6% gains.


Position #4: Pacific Coast Oil Trust (ROYT) July $12.50 Calls

Price Paid: $0.95

Current Price: $0.30

Time Until Expiration: 7 days

ROYT pulled back a bit to a support level. Let’s see if it rebounds enough next week for us to sell out of the options.


Position #5: United Parcel Service (UPS) July $100 Puts

Price Paid: $1.10

Current Price: $0.15

Time Until Expiration: 7 days

UPS has dropped from strong resistance as expected and reached the 50-day moving average. We’ll need another sharp move down next week to get our options back in play.


Position #6: First Majestic Silver (AG) July $10 Calls

Price Paid: $0.68

Current Price: $0.90

Time Until Expiration: 7 days

AG spiked very briefly this week but is back roughly were it was at the time of the last update. We’ll look to take profits on this position early next week.


Position #7: Franco-Nevada (FNV) August $55 Puts

Price Paid: $1.38

Current Price: $0.90

Time Until Expiration: 35 days

FNV jumped a bit on the Portugal scare this week. However, it’s already come back down. I expect it to test the 20-day moving average (around $55) in the near future.


Category: OTW Weekly Updates