Monday, June 23, 2014

Updating the Alpha-D Portfolio for 06/23/14

This weekend's options expiration made me get busier than usual in attending to my portfolio.  My long positions in GDX and FXC rose through the strike prices of the covered calls I wrote last month.  Those securities were called away and I repurchased them all in a wash sale, with no net change in the number of shares I own.  I wrote a new batch of covered calls on all of my holdings in GDX to expire next month, but I wrote no options on FXC.  I am pleased to note that the gold mining sector is beginning to recover from its doldrums and that Canada's rising inflation rate makes currency traders think Canada will raise interest rates.  Those are not the specific reasons why I own GDX and FXC but they do move those ETFs' share prices from time to time.

My covered calls on FXA and FXF expired unexercised.  I renewed the covered calls on FXF but I could not find a way to make any lucrative covered calls work on FXA.  I maintain those positions in the Australian and Swiss currencies against eventual US dollar hyperinflation.  That's also why I maintain my long positions in GDX and FXC.

One difference for me this month is the selection of additional options.  I wrote a cash covered put position under GDX, which I haven't done in a while.  I am risking the possibility that the economics of the gold mining sector are able to rebound.  If I am wrong, then I may at some point be forced to buy some more GDX at a very low price if shares are put to me.  I considered writing puts under FXA and FXC because I was looking for a way to make some extra cash, but it just didn't prove economical for me given this month's option chains.  I may regret not writing covered calls this month on FXA and FXC but the premiums were just too paltry to risk the shares being called away.

Oh yeah, I'm still long a put position against FXE, expiring next year.  If the euro cracks up I should make a small windfall, and if it doesn't then I will buy more long-dated puts.  I'm still sitting on a pile of cash.  That pile awaits a major market correction.  I note with satisfaction that public statements from the Fed and IMF indicate that crisis planning is in full swing.  The beginning of some market crisis will be a trigger for me to consider committing my cash to something.

Note bane:  This is not investment advice.  I have to repeat that admonition because there are still some idiots in the world who mistakenly tell me they think I'm an investment advisor, even though the home page of my Alfidi Capital website says I'm not.  People are idiots.