Hedged Strategy Cheat Sheet

Option Expiration January Sequence Cycle The InvestorsObserver First Month For $1
Dates Exp. Mo Available Months Plus you receive over $900 in bonuses including:
JAN ’07
’04 1/17
1/20 JAN FEB MAR APR JUL • Full access to our entire investment site! - The data, tools,
FEB MAR APR JUL OCT and reports you need for an essential competitive edge.
FEB ’07
’04 2/21
2/17 MAR APR MAY JUL OCT • A free monthly Premium Article (up to a $20 value)
MAR ’07
’04 3/17
3/20
APR MAY JUN JUL OCT • Includes the InvestorsKeyhole with breaking news, tips and
MAY JUN JUL OCT JAN strategies from a network of floor traders, company execu-
APR ’04
’07 4/21
4/17 JUN JUL AUG OCT JAN tives, experts, analysts and timely information resources.
JUL AUG SEP OCT JAN Updated throughout the day.
MAY ’07
’04 5/19
5/22 AUG SEP OCT JAN APR • Two months free of our Portfolio services.
JUN ’07
’04 6/19
6/16 SEP OCT NOV JAN APR And there’s a Money Back Guarantee…
OCT NOV DEC JAN APR See www.InvestorsObserver.com/cs for details
See www.InvestorsObserver.com for details.
JUL ’07
’04 7/17
7/21 NOV DEC JAN APR JUL
DEC JAN FEB APR JUL
AUG ’07
’04 8/18
8/21 Equivalent Annual % Return
February Sequence Cycle
SEP ’04
’07 9/18
9/22 JAN FEB MAR MAY AUG Months 1 2 3 4 5 6 7 8 9 10 11 12
OCT ’04
’07 10/20
10/16 FEB MAR APR MAY AUG Days 30 60 90 120 150 180 210 240 270 300 330 360
MAR APR MAY AUG NOV
NOV ’07
’04 11/17
11/20 APR MAY JUN AUG NOV 2% 24.0 12.0 8.0 6.0 4.8 4.0 3.4 3.0 2.7 2.4 2.2 2.0
MAY JUN JUL AUG NOV
DEC ’04
’07 12/22
12/18 5% 60.0 30.0 20.0 15.0 12.0 10.0 8.6 7.5 6.7 6.0 5.5 5.0
JUN JUL AUG NOV FEB
JAN ’08
’05 1/15
1/19 JUL AUG SEP NOV FEB 10% 120.0 60.0 40.0 30.0 24.0 20.0 17.1 15.0 13.3 12.0 10.9 10.0
AUG SEP OCT NOV FEB
FEB ’08
’05 2/19
2/16 15% 180.0 90.0 60.0 45.0 36.0 30.0 25.7 22.5 20.0 18.0 16.4 15.0
SEP OCT NOV FEB MAY
OCT NOV DEC FEB MAY 20% 240.0 120.0 80.0 60.0 48.0 40.0 34.3 30.0 26.7 24.0 21.8 20.0
MAR ’08
’05 3/22
3/19
NOV DEC JAN FEB MAY
25% 300.0 150.0 100.0 75.0 60.0 50.0 42.9 37.5 33.3 30.0 27.3 25.0
APR ’08
’05 4/19
4/16 DEC JAN FEB MAY AUG
March Sequence Cycle Expiration Month Codes Important Hedged Strategy Web Sites:
MAY ’08
’05 5/17
5/21 Write your broker information here: PowerOptionsPlus.com (Highest return investments)

HOT!
JAN FEB MAR JUN SEP CALLS PUTS
JUN ’08
’05 6/18
6/21 JAN A M MarketIntelligenceCenter.com (Options NewsBites)
FEB MAR APR JUN SEP cboe.com/LearnCenter/Concepts/Basics/terminology.aspx
FEB B N

GETTING STARTED
MAR APR MAY JUN SEP 888options.com/strategy (General Strategies)
JUL ’08
’05 7/16
7/19 MAR C O
APR MAY JUN SEP DEC 888options.com/strategy/covered_call.jsp (Covered Calls)
APR D P
AUG ’08
’05 8/16
8/20 MAY JUN JUL SEP DEC MAY E Q 888options.com/strategy/collar.jsp (Collars)
JUN JUL AUG SEP DEC JUN F R 888options.com/classes/ (Free Online Classes)
SEP ’08
’05 9/17
9/20 JUL AUG SEP DEC MAR 888options.com/resources/investigator (Tool)
JUL G S
AUG SEP OCT DEC MAR AUG H T cboe.com/Strategies/WeeklyArchive.aspx (Ideas)
OCT ’08
’05 10/18
10/15
SEP OCT NOV DEC MAR SEP I U finance.yahoo.com/q/op?s=MSFT (Option Quotes)
NOV ’08
’05 11/22
11/19 OCT J V CNNfn.cnn.com/markets/morning_call/ (A.M. News)
OCT NOV DEC MAR JUN
NOV K W CNN.com (General News)
NOV DEC JAN MAR JUN
DEC ’08
’05 12/20
12/17 DEC L X NYT.com (The New York Times)
DEC JAN FEB MAR JUN WSJ.com (Wall street Journal)

NEWS/RESEARCH
Bloomberg.com (Investment News)
Key A B C D E F G H I J K L M N O P Q R S T U V W X Y Z Msnbc.com
Strike 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 7.5 12.5 17.5 22.5 27.5 32.5 TheStreet.com
CBSMarketwatch.com
Prices 105 110 115 120 125 130 135 140 145 150 155 160 165 170 175 180 185 190 195 200 37.5 42.5 47.5 52.5 57.5 62.5 Quotes.com (Free real-time stock and options quotes)
205 210 215 220 225 230 235 240 245 250 255 260 265 270 275 280 285 290 295 300 67.5 72.5 77.5 82.5 87.5 92.5 MarketEdge.com (Buy, Sell or Hold a Stock )
Bigcharts.com, Barchart.com
MISC...

305 310 315 320 325 330 335 340 345 350 355 360 365 370 375 380 385 390 395 400 97.5 102.5 107.5 112.5 117.5 122.5 Siliconinvestor.com (Gossip in the message boards)
biz.yahoo.com/research/earncal/today.html
Rules of thumb for covered call option investors
1. Avoid writing covered calls over a period of earnings
announcements because sudden price changes can occur.
2. It’s best to write at the money options unless you are
consciously trying to play the market going up (out of
the money) or trying to be more conservative for safety
(go deeper in the money).
3. Don’t try to over trade by attempting to get the last 5
cents. Covered Call writing is a longer period trading
strategy. It involves monthly or quarterly time frames
not hourly.
4. Be consistent, work it every month. The objective is to
do ten trades at 4% not two trades at 20%. Don’t try to
over push the return.
5. When writing out of the money options, consider writing
at least 60 days before the option expiration date to get a
better selling price.
6. When looking for a buy/write investment opportunity be
sure you have considered all the investments that meet
your risk criterion. Why invest your money to get a 7%
return when a 15% return is available. PowerOp-
tionsPlus.com will help you with this.
7. Consider rolling your option positions before expiration
if you can get your targeted profit. If you wait till they
expire, you will be in the market trying to sell them
again with everyone else. The prices will be depressed.
8. If you think the market or a stock is on the way down,
write deep in the money options.
9. If you think the market or a stock is on the way up, write
out of the money.
10. Set a firm profit target (Return %, Annual return %, or
dollars) and stick to it. Don’t make a trade unless you
make money.
11. Don’t panic if one of your stocks goes up and your op-
tions are all in the money. You can always roll the op-
tion out (another month or two) or up (go to the next
higher strike price). And you will probably make money
doing it.
12. When you do a Buy/write covered call for a riskier stock,
let the option expire. Don’t get greedy and roll it again.
Take your money and find new buy/write.
General rules of thumb
1. Avoid trading in the first and last half hour of the trading
day when the market is most volatile and when liquidity
may be lower.
2. Be sure to consider your commission charges when cal-
culating your potential returns.
3. Throughout the year as you rack up more profits, be sure
to put enough money in totally safe investments (CD,
Bond, Money Market) to pay your taxes.
4. Sell on the anticipation of an event (Fed announcement,
earnings report, election, etc…) when everyone else is
buying. When the event finally happens, buying usually
slows down.
5. Don’t over commit your funds. When you have all your
money on the line, you will find it hard to make rational
decisions.
6. Don’t put all your eggs in one basket. Plan to put your
money in a variety of investments in a variety of indus-
tries, sectors, and geographic locations. Don’t put more
than 5% of your total capital in any one investment.
7. Don’t pyramid your profits. When you make a profit,
don’t plow 100% of that profit back into an investment
at the same risk level. Take some money off the table.
8. Expect to lose money on some investments. It happens.
If it doesn’t, you’re not in the market. If you’re diversi-
fied, a few losers won’t hurt too bad.
9. Always trade with a clear profit objective and date.
That’s how you know when to finally get out of an in-
vestment. If you hold everything forever, when do you
really win?
10. Be careful when trading takeover candidates. Most of
these don’t happen and when they do it takes longer than
expected. And when the takeover happens, results usu-
ally sour. It’s hard to put two companies together and
make it really work.
11. Trade based on the numbers and your research. A hunch
may pay off occasionally but that’s called luck. Do the
research and stick with your criterion.
12. Don’t buy a stock just because it is low priced. It could
go lower.
13. Don’t sell a stock just because it is high priced. It could
go higher.
14. Invest only in actively traded stocks and options. Set an
average daily volume target for your new investments
and only trade in those that meet the target.
15. Know what you plan to do before the market opens and
do the research ahead of time. Once trading starts there
may not be enough time to do all the research needed to
make decisions.
16. Get your information from multiple sources. Don’t just
trade on single source newsletters, newspapers, trading
strategies, etc…
17. Only get into an investment based on your research. Not
because the stock is moving up. Not because of a rumor.
Not because of the FED.
18. Always consider your risk and reward on every invest-
ment.
19. Don’t use the money you need to live on to make invest-
ments (except CDs, Bonds, Money Markets). You want
to give your investment time to grow and not have to
cash them in in a panic to make a rent payment.
20. Watch out for so called investment gurus, brokers, ex-
perts, and pundits who don’t trade. If their advice was
right all the time they would be out on their yacht right
now.
21. Forget buying the stocks you see touted in monthly
magazines. That article was written many weeks ago.
22. Trade with the broker that’s right for you. Demand the
service that you want at a reasonable commission rate.
Change brokers if you can’t get it.
23. Be sure to read your execution reports and monthly state-
ments thoroughly. Even the big brokers make mistakes.
24. Try to learn from your own mistakes. It’s okay to make
a mistake once but don’t make the same mistake twice.
25. Set a monthly, quarterly or annual goal for your portfo-
lio. If you make it, celebrate. Go out to dinner, on a trip,
or buy that new car. You deserve it!
Some tricks of the trade
1. Check at cnnfn.cnn.com/markets/morning_call in the
morning before U.S. markets open to see how stocks
are doing in Europe. If they are strong there, they
will most likely be strong here.
2. Check the premarket stock prices as a good indication
of where a stock will open.
3. Each stock and option trade passes through the hands
of a market maker. They each have their own person-
ality and you will see it in the trade execution. Some
will buy faster. Other will wait for the price to come
down. Learn how they work on your frequently
traded positions.
4. Spend the money to get the tools that you need. A
faster computer or Internet connection. The right
book. That essential data service (like InvstorsOb-
server.com or PowerOptionsPlus). These investments
will pay back many times.
5. Level III information – When you want a periscope
into what’s really happening with a stock, look at the
real-time level two trading action. You will see if the
stock is really strong or weak and how long it might
remain that way.
6. At least lurk (read without writing) in the stock bulle-
tin boards. You will get some idea of the sentiment
and maybe even some new strategies. But only trade
on your own research.
7. If you notice a trade pop up on your account that you
didn’t make or that you made in error, call your bro-
ker immediately. They can reverse the trade. Don’t
do it too often.
8. Push your broker for better commissions. He proba-
bly doesn’t want to lose you and you won’t get the
better rates without asking. You will save thousands
a year.
9. Make backups of all your computer records daily.
Spreadsheets, research, trading logs, etc… Your
computer will crash some day and your backups will
save you.
10. Talk to successful investors and learn how they made
money.