Weekly Options Trading Update

Market Beating Options: 100% Gain On VIX Expiration

The Aggressive Portfolio fell slightly for the week but the YTD remains exceptional at 29% and well ahead of the market return. We had two short option positions expire last week leaving us with 100% returns on both. We had taken a short spread position against the VIX index when the market suffered setbacks about a month ago. We got in at just the right time for when the market quickly recovered our short positions were quickly in the money. We do have other call option positions we are holding, but frankly they have just been moving sideways over the past week or so. We are currently sitting on a lot of cash in this portfolio. We are watching the overall market movement closely and will make additional investments in call options if market levels stay above the 1100 level. We bought one call option last week when the market hit this level and that was an option on Par Pharmaceutical. We were able to buy this option at a premium price that was only 11% above the current stock and exercise price. That is an excellent value for a long term option on a stock that has strong appreciation potential. We think we may be in position for big gains on this one if the underlying stock does well. We will buy more call options if the market can continue its march upwards. If we have another short term panic and premium prices rise, we may jump in and take another short position against the VIX and/or S&P Index. As we have said before, we remain cautious on call options at least until the market can sustain 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 355% return on our portfolio return since inception in January 2007.

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