High Profit - Low Risk Trading

Who We Are

1. Leading stock market education

company in the United States &
Canada

2. Courses taught by experienced,

successful traders

3. Since 1993, we have helped over

30,000 students trade the markets
successfully.

Option Elements

Strike

Prices

Expiration
Months

Call Prices:

Price of XYZ - 105

STR July

Aug

Oct

100

6.3

7.5

8.2

105

2.0

3.9

4.7

110

0.4

1.6

2.7

Stock

Price

Option Premiums

1. Uses discretionary method

2. Greed and Fear

3. Buy Low – Sell High

4. The Religious Approach

5. System Trading with Limited

Risk

Average Trader

Dogs of the DOW System

1. Uses the DOW 30 Stocks
2. System only BUYS certain stocks
3. One Year Trading System
4. No Risk Management

Stock Symbol Price 12/31 Yield Price Today Difference

Yield

Totals

29.43

34.06

4.63

0.450279 5.080279

JPM

36.35

34.96

-1.39

0.3398725 -1.05013

SBC

39.17

39.25

0.08

0.25558425 0.335584

40.35

45.98

5.63

0.25017

5.88017

XOM

39.9

44.02

4.12

0.233415 4.353415

Totals

185.2

14.59932

ROI

Annualized

32%

Dogs of the Dow for 2002 January - March

16%

System Recap

Long Term Stock Buying System

Unlimited Returns (Best 40% in One Year)

Substantial Risk (Actual worst was 6.8% for One
Year)

Outperforms nearly every fund in the last 30
years (Average Annual Returns – 22% in the last
30 years)

Analyzing Positions

1. What if I am right?

2. What if I am wrong?

3. Great traders look at risk.

FIRST !

Bullish

Buy a Call instead of buying stock

• Lower Cost and Risk

• The Power of Leverage

• The Power or Protection

Dogs of the DOW System

Using Call Options

1. Uses the DOW 30 Stocks
2. Buy 1 year ATM Call Options
3. Rebalance each year in December

Stock Symbol Premium Yield Price Today Difference

Yield

Totals

3.5

0.5

JPM

3.5

3.2

-0.3

SBC

6.5

2.5

XOM

Totals

18.5

Interest

2.3125

Profit

7.0125

ROI

38%

Annualized

152%

Options on the Dogs of the Dow for 2002

76%

Bearish

Buy a Put instead of selling stock

• Lower Cost and Risk

• The Power of Leverage

• The Power or Protection

DOW Sell System

Buy 60-90 Day Put Options on the

DOW when the VIX drops below a
level of 20.

Exit the trade within 30 days to

expiration.

Index System

VIX Sell Signals for the last 3 Years

Index System

5/20/2002 19.99

DOW DROPS 1000 points JUL02 Puts up 220%

The Option Returns reflect buying 60-90 Day options and holding them no
longer than 30 days to expiration.

NOTE

– We will show you a system using this indicator that works 96% of

the time with Delta Neutral Trades

Spreading

With “Creative Financing” we can trim

the cost of our trades, therefore:

1. Further reducing both the cost and risk

2. Reducing the Breakeven on the Trades

3. Increasing the Return in Investment

4. Smoothing out the equity curve and stress

Stock Symbol Premium Yield Price Today Difference

Yield

Totals

1.5

JPM

2.5

2.8

0.3

SBC

2.5

3.5

2.5

5.5

XOM

2.5

Totals

11.5

Interest

2.3125

Profit

10.6125

ROI

92%

Annualized

369%

Spreads on the Dogs of the Dow for 2002

184%

Comparing Trades

• Dogs of the Dow original system would

cost $18,500 for 100 shares of each
stock.

• Dogs of the Dow call option system

would cost $1850

• Dogs of the Dow Spreading would cost

just $1050

• Using Options lowers the risk

dramatically on this safe system

Optionetics

• Visualize your Risk

to determine the

BEST strategy to use.

• Combining Options into “Spreads” -

Slash your risk over 90%!!!

• Great Trading Systems

to use the other

11 months of the year.

• TRADING SESSION

Using the right tools

and indicators for High Octane/ High
Probability trades.

1500/500/5