Weekly Options Trading Update

Market Beating Options: Portfolio Rises 15% In One Week

Wow! A big move in our Aggressive Portfolio last week rising 15% and increasing the YTD return to 32%. That is a big move in just one week, but as we have said many times trading options is risky and returns can be very volatile. The biggest mover last week was our call option sale on Innophos Holdings. We sold this call option for a huge 202% gain as the underlying stock price made a strong move up based on their recent earnings report. Returns like that are possible on call options, if you can pick underlying stocks that make big moves like this one. We also closed our short position against the SPX index for a 95% gain. This was a short put position that expires in November which lost value quickly when the market rose sharply. We held this position for less than two weeks and were thrilled with a 95% gain! Our other short positions against the VIX Index have also made big moves. We took these positions on November 2 when the market moved sharply down and premiums were high. Now that the market has recovered, premium prices have fallen sharply and our positions have made big moves. We are now sitting on a 95% gain on a short VIX call option and a 20% gain on a short VIX put option, both purchased less than two weeks ago. Both options expire next week and if we can hold out until expiration that will bring 100% gains on both positions. We are 50% invested and may buy another call option or two if we find compelling opportunities. However, we remain cautious on call options at least until the market can break through the 1100 level on the S&P. We do not feel the need to be too aggressive right now given that we have already earned an astounding 365% return on our portfolio return since inception in January 2007.

Portfolio Details Available Online At: http://www.marketbeatingstocks.com