SPX Short Position Gains Ground as Expiration Approaches

The Aggressive Portfolio rose 1.2% for the week, a good gain in light of the flat market performance. Our biggest gainer was our short put position on the SPX index that expires in December that has an exercise price of 995. The put premium lost 63% of its value last week which is money to us. Out of the money options drop in premium value rapidly as expiration dates close in. We feel pretty confident that we will our close this position with a 100% gain. The other big mover was Amedisys which rose 37% for the week. The underlying stock made a big move and our call option followed suit. All in all, we are happy with the turnaround we have had in this portfolio over the past two months. We expect 2010 to be another good year for trading options. We do plan to become more aggressive trading call options next year as long as the market can hold the 1100 level on the S&P. We also plan to trade more income producing opportunities as that will help enhance returns in the slower growth market that we expect next year. Since inception in January 2007 this portfolio is up an astronomical 378% versus a market loss of 22% over that same time period. We know we need a higher return on this portfolio to compensate for the additional risk. But no doubt returns like these more than compensate for that additional risk.

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