july 17th, 2011

* With the Federal budget in limbo, take extra caution this month. As always never put more than 5 or 10% of your trading cash into any single trade.
The Rowboat
Step 1 : Sell the Put
AGNC @ $29.27
Sell to Open AGN
C August 2011 $31.00 Put @ $1.80 (5.80% in 34 days)
Be aware of this:
http://seekingalpha.com/article/279566-mreits-protect-your-investments-if-debt-ceiling-unresolved?source=yahoo
If you already own this stock, see next section.
American Capital Agency Corp. (AGNC) operates as a real estate investment trust (REIT).
It invests in agency pass – through securities and collateralized mortgage obligations for
which the principal and interest payments are guaranteed by a U.S. Government agency
or a U.S. Government sponsored entities. The company funds its investments primarily
through short – term borrowings structured as repurchase agreements. It has elected to be
taxed as a REIT under the Internal Revenue Code of 1986. As a REIT, the company
would not be subject to U.S. federal or state corporate taxes on its taxable net income to
the extent that the company distributes its annual taxable net income to its stockholders.
AGNC is externally managed and advised by American Capital Agency Management,
LLC, a subsidiary of a wholly – owned portfolio company of American Capital, Ltd., an
alternative asset manager included in the S&P 500. The company was founded in 2008
and is based in Bethesda, Maryland.

Step 2:If it got Put to you, now we:Sellthe
Covered Call
AGNC @ $29.27
Sell to Open AGNC August 2011 $30.00 Call @ .25c
(+ .08% in 34 days)
We are into this stock for the $1.40 per share dividend, selling this Call is safe, and just boosts our return. No sense
letting the money sit idle when it can be working.

How did we do last Month? / Current Positions ~ Do not Buy

PAY@ $42.75
Last Months Called expired, so let us sell it again. Sell to Open PAY August 2011 $46.00 Call @ $1.05
(+ 2.44% in 34 days)
History: We have collected $2.45 in premium’s so far (5.69%)

05/23/2011 Sell To Open
PAY Jun11 43 Put $1.70
06/17/2011 Buy PAY – Option Assignment
$43.00 06/17/2011 Buy To Close
PAY Jun11 43 Put $0.00
06/20/2011 Sell To Open
PAY Jul11 44 Call $0.75
IDCC @ $43.01
Last Months Called expired, so let us sell it again. Sell to Open IDCC August 2011 $48.00 Call @ $1.40 (+3.22%)
History: We have collected $2.80 in premium’s so far (6.36%) 06/20/2011 Sell To Open
IDCC Jul11 44 Call $0.40
06/19/2011 Buy To Close
EXPIRED IDCC JUN11 45 CALL $0.00
05/23/2011 Sell To Open
IDCC Jun11 45 Call $0.95
05/20/2011 Buy To Close
IDCC May11 44 Put $0.00
05/20/2011 Buy 100 IDCC – Option Assignment $44.00
04/18/2011 Sell To Open IDCC May11 44 Put $1.45
PAAS@ $33.40
Our Oct 2011 $36.00 Call is still cooking.History: We have collect
ed $2.85 in premium’s so far(7.91% ) 06/20/2011 Sell To Open
PAAS Oct11 36 Call $0.80 06/19/2011 Buy To Close
EXPIRED PAAS JUN11 36 CALL $0.00
06/16/2011 PAAS QUALIFIED DIVIDEND $.025
05/23/2011 Sell To Open PAAS Jun11 36 Call $0.50

05/20/2011 Buy PAAS – Option Assignment
$36.00 05/20/2011 Buy To Close
PAAS May11 36 Put $0.00
04/18/2011 Sell To Open
PAAS May11 36 Put $1.55
VVUS @ $8.34
Called away with a $1.00 profit.
History: We have collected $4.35 in premium’s so far
(62.14% ) Total return is $5.35 (76.42%)
06/21/2011 Sell To Open VVUS Jul11 8 Call $0.27
06/19/2011 Buy To Close EXPIRED VVUS JUN11 8 CALL
$0.00 03/21/2011 Sell To Open
VVUS Jun11 8 Call $0.35 02/20/2011 Buy To Close
EXPIRED VVUS FEB11 8 CALL $0.00
01/26/2011 Sell To Open
VVUS Feb11 8 Call $1.15
01/22/2011 Buy To Close
EXPIRED VVUS JAN11 10 CALL $0.00
12/17/2010 Buy To Close
VVUS Dec10 7 Call $0.00
12/15/2010 Sell To Open
VVUS Jan11 10 Call $0.39
08/23/2010 Sell To Open
VVUS Dec10 7 Call $0.99
07/16/2010 Buy VVUS – Option Assignment
$7.00 07/16/2010 Buy To Close
VVUS Jul10 7 Put $0.00
06/28/2010 Sell To Open
VVUS Jul10 7 Put $1.20
MELA@ $2.20
Sell to Open MELA August 2011 $ 2.50 Call @ .25c
History: We have collected $1.50 in premium’s so far
( 37.50%) 05/23/20
11 Sell To Open MELA Jul11 3.5 Call $0.30
05/22/2011 Buy To Close EXPIRED MELA MAY11 4 CALL
$0.00 04/19/2011 Sell To Open
MELA May11 4 Call $0.15 04/17/2011 Buy To Close
EXPIRED MELA APR11 5 CALL
$0.00 01/24/2011 Sell To Open
MELA Apr11 5 Call $0.20 12/17/2010 Buy MELA – Option Assignment
$4.00 12/17/2010 Buy To Close
MELA Dec10 4 Put $0.00
11/01/2010 Sell To Open
MELA Dec10 4 Put $0.85
“Only when the tide goes out do you discover who’s been
swimming naked.“

~
Warren Buffet
Until Next Time
Brad Lee
The Options Oracle

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