Too Fragile For Call Options

Options: 25% Premium Over Market Return YTD

The Market Beating Stocks Options Portfolio continues to sport an exceptional 244% return since January 2007. Year to date, this portfolio continues to beat the market return by a large margin, an excess premium of almost 25%! As we mentioned before, we do plan to look for more opportunities to make money writing options as the risk premiums right now are quite high given recent market turbulence and the underlying volatility. We may also consider some tax strategies that involve writing puts and buying calls on specific “oversold” stocks in our portfolios that allow us to take advantage of tax losses before year end. We are not quite ready to begin buying straight call options on new investments as we are still not comfortable with future market direction over the short term. The market is just too fragile and volatile right now and the 3-6 month outlook is very uncertain. We are now 100% cash in this options portfolio and will likely stay mostly in cash though year end unless we uncover very compelling opportunities.