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Thursday, May 22, 2008

Continuation Transaction -- AU Optronics

The following transaction was made yesterday to establish a covered calls position against the 1000 shares of AUO:
05/22/08 Covered Calls Continuation Transaction -- STO 10 Jun08 $20 Calls @ $.40

The Transactions History to date is as follows:
05/01/08 Initial Stock Purchase Transaction -- Bought 1000 AUO @ $19.778
05/01/08 Initial Calls Sold Transaction -- Sold 10 AUO May08 20 Calls @ $.60
05/17/08 May08 Options Expired. Note: AUO closed at $19.31 on this expiration Friday.
05/22/08 Covered Calls Continuation Transaction -- Sold 10 Jun08 20 Calls @ $.40

The overall performance results(including commissions)for the AUO transactions through the Jun08 expiration would be as follows:

Stock Purchase Cost: $19,786.95
($19.778*1000+$8.95 commission)

Net Profit:
(a) Options Income: $967.10 (1000*($.60+$.40 - 2*$16.45 commissions)
(b) Dividend Income: $0
(c) Capital Appreciation (If exercised): +$204.10
= ($20.00-$19.778)*1000 - 2*$8.95 commissions

Total Net Profit(If stock price exercised): +$1,171.20
= (+$967.10+$0+$204.10)

Annualized Return If Exercised (ARIE) +42.4%
(+$1,171.20/$19,786.95)*(365/51 days)

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