Profitable Options Track Record

January – June 2010

Stock Sym Call/ Expiration/ Date Exit Profit Put Strike Price Entered Date (Loss)

PS Ag Fd DBA C Apr 25 11/16: 3.50 12/22 +$600

PS Sht S&P SH C Feb 45 10/18: 3.50 12/1 ($250)

PS UltrS&P SDS C Mar 25 10/18: 4.50 12/2 ($250)

Dia Series DIA P Mar 115 10/20: 8.00 12/7 ($400)

FTSE China FXI P Jan 40 7/13: 3.00 12/1 ($100)

Un Nat Gas UNG C Jan 5 8/16: 2.50 1/3 ($150)

Euro FX FXE P Jan 140 10/14: 4.00 1/3 +$270

Rdx Yen FXY P Mar 135 12/15: 6.00 12/30 ($300)

PS Sh QQQQ PSQ C Jan 35 11/8: 1.50 1/3 ($160)

Ult 20 yr Trs TBT C Jan 30 7/12: 7.00 1/3 Even

Goldcorp GG C Jan 40 5/5: 5.00 1/3 +$100

Newmont NEM C Jan 60 10/21: 3.50 1/3 Exit ($105)

Baker Hughes BHI C Apr 50 1/6: 8.00 1/26 +$800

Ensco ESV C Mar 45 12/8: 6.00 1/31 +$420

Arch Dans ADM C Mar 25 12/28: 5.00 1/18 +$500

Drx 20 Yr 3x TMV C Feb 35 11/3: 6.00 1/20 +$600

Kohl’s KSS P Apr 60 12/7: 6.00 1/19 +$600

iShrs Silv Tr SLV C Apr 25 12/8: 4.00 1/20 Even

Mkt Vctr Gld GDX C Mar 55 12/10: 6.50 1/16 ($150)

SPDR Gold Tr GLD C Mar 130 12/16: 9.00 1/4 ($100)

PS Sht DJIA DOG C Feb 40 12/16: 4.50 1/31 ($100)

IAMGOLD IAG C Mar 15 11/5: 2.50 1/20 +$250

Xerox XRX C Apr 9 12/15: 2.00 1/18 +$200

HiYld Crp Bd HYG P Mar 95 11/4: 7.00 1/16 ($200)

FTSE Chn Idx FXI P May 50 11/8: 5.50 1/31: +$180

Rydex Euro FX FXE P Mar 140 12/13: 7.00 1/24 ($100)

PS QQQQ QQQQ P Mar 60 12/16: 6.00 1/26 ($200)

Bank of Amer BAC C Mar 9 12/7: 3.00 1/31 +$110

Archer Danls ADM C June 30 1/31: 3.00 2/17 +$300

Conoco Phill COP C May 60 1/10: 7.00 2/22 +$700

Seabridge SA C Mar 25 1/6: 6.50 2/23 +$600

Nabors NBR C June 20 12/17: 4.00 2/18 +$400

Buffalo Wngs BWLD P Mar 50 12/16: 5.00 2/13 Even

Microsoft MSFT C Apr 25 1/14: 3.00 2/15 ($100)

Aeropostale ARO P Apr 28 12/16: 4.50 2/11 ($150)

CVS Cremrk CVS C May 30 1/19: 5.00 1/31 ($200)

S&P 500 Tr SPY P June 135 1/12: 11.00 2/18 ($300)

Kinross Gold KGC C May 15 12/16: 4.00 2/22 ($200)

Encana ECA C Jan 30 3/10: 3.50 3/20 +$250

Best Buy BBY P June 40 1/5: 6.00 4/4 +$555

Silver Stand SSRI C June 20 1/10: 7.50 4/4 +$450

Hwltt Pckrd HPQ P May 50 1/10: 8.00 4/4 +$100

Encana ECA C July 30 2/8: 3.00 4/4 +$230

Arch Coal ACI C July 30 2/9: 4.50 4/4 +$205

Rydx Cn Dlr FXC C June 95 12/20: 5.00 4/4 +$320

Coca Cola KO C May 60 1/5: 4.50 4/4 +$300

Kinross Gold KGC C May 15 1/5: 4.00 4/4 ($300)

PS US $ Bull UUP P June 25 2/14: 3.00 4/4 Even

IS 7-10 yr Trs IEF P Jun 100 1/10: 7.00 4/4 +$100

IS Hiyd CpBd HYG P June 95 2/7: 7.00 4/4 ($200)

Dia Trust DIA P Jun 124.75 2/18: 8.00 3/29 ($300)

Rdx Eu FX FXE P June 140 2/1: 6.00 3/21 ($300)

PS Ulsh 20Yr TBT C Jun 32 12/6: 6.00 3/29 Even

Yamana Gold AUY C July 10 1/6: 3.00 4/4 Even

Royal Gold RGLD C Jan 40 3/11: 10.00 4/27 +$1,000

Goldcorp GG C Jan 40 3/16: 8.00 4/21 +$800

C R Bard BCR C July 90 3/16: 9.00 5/2 +$800

Novartis NVS C Jan 50 4/18: 4.50 4/28 +$450

Venoco VQ C Sept 15 3/10: 3.50 5/2 Even

Talismn En TLM C July 20 3/10: 4.50 5/2 Even

PS UlSht20yr TBT C Sept 33 2/22: 6.50 4/18 ($250)

IS China Ind FXI P Aug 45 2/2: 5.00 5/2 ($300)

Eldorado EGO C Jan 10 3/10: 5.50 5/2 +$310

Cameron CAM C Jan 50 3/31: 12.00 4/11 ($200)

PS Sht 20 yr TBF C Sept 41 3/1: 4.00 5/2 Even

IS FTSE Chn FXI P Jan 45 3/8: 4.50 5/2 Even

PS QQQ Tr QQQQ P Jan 65 3/3: 8.00 5/2 Even

IS 7-10 yr Trs IEF P Jan 100 3/15: 9.50 5/2 Even

Kinross KGC C Jan 10 3/3: 5.50 5/2 Even

Suncor En SU C Jan 40 3/15: 7.50 5/2 +$130

Archr Danls ADM C Jan 30 3/15: 6.50 5/2 +$125

Pfizer PFE C Jan 15 4/21: 4.50 5/2 +$150

PS Shrt S&P SH C Nov 33 4/21: 6.50 5/2 ($150)

Altria MO C Jan 20 4/25: 5.00 5/2 +$180

Kmberly Clrk KMB C Jan 60 4/25: 4.50 5/2 +$200

PS short Dow DOG C Nov 33 4/26: 7.50 5/2 +$110

Cameco CCJ C Jan 25 4/12: 5.50 5/2 Even

Nexen NXY C Sept 20 41/5: 4.50 5/2 +$200

FTSE Xin Ch FXI P Jan 50 4/21: 6.00 5/2 +$100

IS 7-10 Trs Bd IEF P Jan 100 4/26: 9.00 5/2 Even

Bank of NY BK P Jan 35 4/11: 5.00 5/2 +$150

US Bank USB P Jan 30 4/7: 4.00 5/2 +$100

Agnico Egl AEM C Aug 60 3/15: 9.00 5/13 ($200)

Barrick Gold ABX C Jan 45 3/16: 8.00 5/13 ($200)

PS UlSh 20Tr TBT C Jan 30 3/1: 8.50 6/1 ($350)

PS Ulsh 20Tr TBT C Jan 30 4/26: 8.00 6/1 ($200)

OPTIONS HIGH RISK FOR POTENTIAL HIGH REWARD

Options trading has large potential risks and also large potential rewards. You must be aware of the risks and be willing to accept them in order to invest in the options markets. Don't trade with money you can't afford to lose. We are not recommending the purchase or short sale of these options. The Model Portfolio is hypothetical. Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. All trades, patterns, charts, systems, etc., discussed in this publication and associated product materials are for illustrative purposes only and are not to be construed as specific advisory recommendations.

Trading should be based on your own understanding of market conditions, price patterns, and risk. Our information is designed to contribute to your understanding of market conditions, price patterns, and risk. Controlling risk through the use of protective stops is critical. This newsletter has been prepared solely for informational purposes and is not a solicitation, or an offer to buy or sell any security. It does not purport to be a complete description of the securities markets, or developments referred to in the material. All expressions of opinion are subject to change without notice. The information is obtained from sources which we consider reliable but we cannot guarantee that it is accurate or complete. We do not undertake to advise you of any change in figures or our views. We, our employees, clients, and or officers and directors, may from time to time have a long or short position in the securities mentioned and may sell or buy such securities. This publication should be used only by sophisticated investors who are aware of the risks in forecasting and in options trade. It is recommended that readers carefully read the prospectus prepared by the Options Clearing Corporation and restrict commitments to funds that can be lost without undue financial hardship.

Hypothetical Trading Disclaimer

Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the options markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed in this newsletter. The past performance of any trading system or methodology is not necessarily indicative of future results.

HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

All trades, patterns, charts, systems, etc., discussed in this publication and associated product materials are for illustrative purposes only and are not to be construed as specific advisory recommendations.

The Limitations of

Hypothetical Trading

The monthly Track Record is merely a guide to how an average trader MAY do with our ideas. You should NEVER make a trade basely solely on the ideas in this newsletter. It is important that you do your own research and consult with a registered financial professional on every position prior to committing your own money.

We consider that a position may be entered if the bid/ask spread swings during the day are such that splitting the difference will be near our buy point. No representation is being made that trades are actually executed at these prices.

Money Management Guidelines

Openings tend to be overbought or oversold. If possible wait for the market to open before placing your orders.

We actually prefer to enter or exit trades in the last 30 minutes of trading but realize that is difficult for many of our subscribers. Be very careful with overnight orders especially in volatile markets like the present.

One of most important rules is to cancel your buy if the market gaps against you. That is another reason to trade after the opening.

Try to trade during the market hours, not at the opening. Openings tend to be quite overbought or oversold because they reflect an imbalance of orders from public traders received overnight.

You should trail stops between issues as move in your favor.

Never let a 50% profit turn into a loss. For example, if you buy at 4, with an initial stop of 2, that stop should be trailed to 4, when the option hits 6. Then continue to trail the stop loss closer as the option moves higher toward your profit target.

Your stop loss should be fairly close at entry, give it more room in the middle of the move, and as the price approaches your target, move the stop closer to lock in as much profit as possible.

There is no perfect stop loss method. Experience is the best teacher.

Limiting your losses is the single most important factor in your long term success as a trader. Losses are the largest expense that your “trading business” incurs.

Between Issues

Options are deteriorating assets, i.e., every day that goes by without a move by the underlying stock, an option becomes less valuable. Never chase a price for Call or Put. Let the price come to you. When we say “buy near” it means to buy when the option price pulls back (lower lows) for 2, 3 or 4 days. No stock goes straight up (or straight down) in price. Prices move in waves. Timing is even more critical with options than when buying stocks

Another entry approach is to watch for a pullback to a stock’s uptrending 20 day moving average to buy the suggested underlying Call. More conservative traders should wait for a pullback to its 50 day moving average.

To be successful you must be actively involved in your trading. Much can change in a month. Our monthly recommendations are only a starting point. The best time to act on suggestions is the 3 weeks after publication.

By trailing stops and adjusting buy zones you should significantly outperform the Model Portfolio.

To be successful trading options you must be actively involved on a daily basis. Much can and does change during a whole month of trading. Daily changes are often dramatic. Our monthly recommendations are only a starting point. You need to review your positions every day.

Trailing your stops as the option goes up is critical to maximizing your success. Once an option goes up 50%, you should not then let the price drop back to a loss.