Returns -- Through August 2009

This report presents the Covered Calls Advisor Portfolio (CCAP) performance results through August 2009.

1. Month of August 2009 Result:

The Covered Calls Advisor Portfolio increased by 1.96% for the month of August 2009. In comparison, the benchmark Russell 3000 index (IWV) increased by 3.50% for the month.


2. Year-to-Date Through August 2009 Results:

The 2009 Year-to-Date results are as follows:

CCAP Absolute Return (Jan 1st through August 31, 2009) = +32.85%
= ($265,345.35 - $199,733.10)/$199,733.10

Benchmark Russell 3000(IWV) Absolute Return (Jan 1st through August 31,2009) = +14.77%
= ($59.68 - $52.00)/$52.00

For the first eight months of 2009, the table below shows that CCAP has outperformed the Russell 3000 benchmark by 18.08 percentage points (32.85% - 14.77%):















3. Prior Years Results:

The Covered Calls Advisor Portfolio (CCAP) was begun in September, 2007. The annualized returns achieved for 2007 and 2008 compared with the Russell 3000 benchmark results were as follows:









Note: This Covered Calls Advisor uses a bottom-line performance measure to determine overall portfolio investment performance results -- it is called 'Total Account Value Return Percent'. A simple example demonstrates how it is calculated:
If the total CCAP portfolio value was $100,000 at the beginning of the calendar year and $110,000 at the end of that year (and with no deposits or withdrawals having been made), then the 'Total Account Value Return Percent' would be +10.0% [($110,000-$100,000)/$100,000]*100.

If you have any comments or questions, please feel free to submit them -- they are always welcomed. Click the 'comments' link below or post them on the justcoveredcalls Yahoo!Group site. If you prefer confidential communications, my email address is listed at the top-right sidebar of this blog site.

Regards and Godspeed,

Jeff

Establish iShares MSCI China ETF Covered Calls

A new covered calls position was established today in the Covered Calls Advisor Portfolio(CCAP) with the purchase of iShares MSCI China ETF (FXI). The previous FXI position with a Aug09 expiration ended in-the-money, so the FXI ETF position was called away. Since China continues to rank #1 in this advisor's '2009 Country Value Rankings', it was decided to establish a new covered calls position in FXI with an Sep09 expiration. A summary of the transactions today is as follows:

Established iShares MSCI China ETF (FXI) Covered Calls for Sep09:
08/28/09 Bought 1000 FXI @ $40.04
08/28/09 Sold 10 FXI Sep09 $39.00 Calls @ $1.95

The FXI ETF was selected as the primary investment vehicle for achieving exposure to China's stock market performance. It consists of market-cap-weighted positions in the 25 largest companies in China, and although it is most heavily weighted in the financial, energy, and telecommunications sectors, it still provides a relatively good way to diversify across the Chinese economy. Since China remains as the Covered Calls Advisor's top investment idea, a major commitment of 15% of the total CCAP is now allocated to FXI covered calls.

Some key indicators for this FXI covered calls position are:

Absolute Return if Exercised at $39.00: +2.3%
= [$1.95 - ($40.04 - $39.00)]/$40.04
Annualized Return if Exercised(ARIE): +37.7%
= [$2.45 - ($40.44 - $39.00)]/(365/22 days)

Downside Breakeven Price Point: $38.09
Downside Breakeven Protection: 4.9%
This in-the-money position also affords up to 2.6% [($40.04-$39.00)/$40.04] downside protection available while still achieving the maximum potential annualized return-on-investment of 37.7% from this covered calls position.

Establish ProShares Short S&P 500 ETF Covered Calls

A new covered calls position was established today in the Covered Calls Advisor Portfolio(CCAP) with the purchase of ProShares Short S&P 500 ETF (SH) covered calls as follows:

Established ProShares Short S&P 500 ETF (SH) Covered Calls for Sep09:
08/25/09 Bought 900 SH @ $57.74
08/25/09 Sold 9 SH Sep09 $59.00 Calls @ $.80

The ProShares Short S&P 500 ETF tracks the inverse of the S&P 500 index. This is the first time the Covered Calls Advisor has established a covered calls position in an inverse ETF. This position was established with approximately 20% of the Covered Calls Advisor Portfolio(CCAP) so that the CCAP for the Sep09 expiration will be 80% long and 20% short in the underlying equities. This approach was done to provide a better match with the current Overall Market Meter rating (see upper right sidebar) of "Neutral", whereas the CCAP's normal 100% long equities approach tends to result in a slightly bullish posture. This 80/20 long/short approach is similar to the long/short approach of numerous hedge funds and will result in improved overall returns relative to the Russell 3000 benchmark if a price correction occurs in the overall market during the current expiration month. I will be closely monitoring the interplay between the long and short components of the CCAP this month to seek new insights into the inherent advantages and disadvantages of this approach.

Some potential results from this transaction are:
Absolute Return if Stock Price Unchanged at $57.74: +1.4%
Annualized Return If Unchanged (ARIU): +20.2%

Absolute Return if Exercised at $59.00: +3.6%
Annualized Return If Exercised (ARIE): +52.1%

Downside Breakeven Price Point: $56.94
Downside Breakeven Protection: 1.4%

If you have any comments or questions, please feel free to submit them -- they are always welcomed. Click the 'comments' link below or post them on the justcoveredcalls Yahoo!Group site. If you prefer confidential communications, my email address is listed at the top-right sidebar of this blog site.

Establish iShares MSCI Emerging Markets Fund ETF Covered Calls

A new covered calls position was established today in the Covered Calls Advisor Portfolio(CCAP) with the purchase of iShares MSCI Emerging Markets Fund ETF (EEM) covered calls as follows:

Established iShares MSCI Emerging Markets Fund ETF (EEM) Covered Calls for Sep09:
08/25/09 Bought 500 EEM @ $36.64
08/25/09 Sold 5 EEM Sep09 $36.00 Calls @ $1.56

The iShares MSCI Emerging Markets Fund ETF is a diversified Exchange Traded Fund(ETF) with investment exposure in global emerging market(GEM) countries such as Brazil, China, S Korea, Taiwan, and India. Historically, GEM stocks perform well during the recovery cycle after a recessionary period. We are likely at the threshold of such a recovery since it is probable that the U.S. Institute of Supply Management(ISM) manufacturing index is likely to return to a positive reading either this month or next, and according to research from Credit Suisse "GEM has historically rallied by 41% in the 12 months after the US ISM rose above 50 (and importantly stayed above 50) on the last three occasions -- August 1996, January 1999 and July 2003. Indeed, historical P/E for GEM currently at 13.1x is similar to the 13.3x average seen at the start of those three rallies."

Some potential results from this transaction are:
Absolute Return if Exercised at $36.00: +2.5%
= [($1.56-($36.64-$36.00)]/$36.64
Annualized Return If Exercised (ARIE): +37.0%
= {[($1.56-($36.64-$36.00)]/$36.64}*(365/25 days)

Downside Breakeven Price Point: $35.08
Downside Breakeven Protection: 2.5%

Continuation Transaction -- Aspen Insurance Holdings Ltd.

Last Friday was expiration Friday for August 2009. In a Covered Calls Advisor's blog recent post, it was noted that of the eight covered calls positions for August 2009, four were exercised and the stock was called away. The remaining four Aug09 positions expired out-of-the-money. Today it was decided to retain the 500 shares of Aspen Insurance Holdings Ltd.(AHL) and to establish a Sep09 covered calls position.

The transactions history to date and the profit potential for the continuation covered calls position in AHL is as follows:

Aspen Insurance Holdings Ltd.(AHL) -- Continuation Transaction
The following transaction was made today to establish a covered calls position against the 500 shares owned in Aspen Insurance (AHL):
08/25/09 Sell-to-Open (STO) 5 AHL Sep09 $25.00s @ $.65

The transactions history to date is as follows:
07/21/09 Bought 500 AHL @ $24.95
07/21/09 Sold 5 AHL Aug09 $25.00 Calls @ $.90
08/22/09 Aug09 Options Expired
The price of AHL closed at $24.74 on expiration Friday.
08/25/09 Sell-to-Open (STO) 5 AHL Sep09 $25.00s @ $.65
The price of AHL was $24.70 today when this transaction was executed.


The overall performance results(including commissions) for this AHL covered calls position would be as follows:
Stock Purchase Cost: $12,483.95
($24.95*500+$8.95 commission)

Net Profit:
(a) Options Income: +$774.60
= (500*($.95+$.65) - 2*$12.70 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $24.70):
-$133.95 = ($24.70-$24.95)*500 - $8.95 commissions
(c) Capital Appreciation (If exercised at $25.00): +$16.05
= ($25.00-$24.95)*500 - $8.95 commissions

Total Net Profit(If stock price unchanged at $24.70): +$640.65
= (+$774.60 +$0.00 -$133.95)
Total Net Profit(If stock price exercised at $25.00): +$790.65
= (+$774.60 +$0.00 +$16.05)

Absolute Return if Stock Price Unchanged at $24.70: +5.1%
= +$640.65/$12,483.95
Annualized Return If Stock Price Unchanged (ARIU): +31.2%
= (+$640.65/$12,483.95)*(365/60 days)

Absolute Return if Exercised at $25.00: +6.3%
= +$790.65/$12,483.95
Annualized Return If Exercised (ARIE) +38.5%
= (+$790.65/$12,483.95)*(365/60 days)

Establish Accenture Ltd. Covered Calls

A new covered calls position was established today in the Covered Calls Advisor Portfolio(CCAP) with the purchase of Accenture Ltd (ACN) covered calls as follows:

Established Accenture Ltd(ACN) Covered Calls for Sep09:
08/24/09 Bought 300 ACN @ $35.51
08/24/09 Sold 3 ACN Sep09 $35.00 Calls @ $1.15

Accenture Ltd. is a leading management consulting, technology services, and outsourcing company with worldwide operations. It is rated as a Strong Buy by both stock advisory services used by this advisor (Schwab Equity Ratings and MarketGrader.com) and also scored well above the minimum threshold of 20.0 on the Covered Calls Advisor's 'Buy Alerts' spreadsheet with a Total Points rating of 24.38.






















Note: For expanded view, left click on the spreadsheet above.

Some potential results from this transaction are:
Absolute Return if Exercised at $35.00: +1.8%
= [($1.15-($35.51-$35.00)]/$35.51
Annualized Return If Exercised (ARIE): +25.3%
= {[($1.15-($35.51-$35.00)]/$35.51}*(365/26 days)

Downside Breakeven Price Point: $34.36
Downside Breakeven Protection: 3.2%

Establish Diana Shipping Inc. Covered Calls

A new covered calls position was established today in the Covered Calls Advisor Portfolio(CCAP) with the purchase of Diana Shipping Inc (DSX) covered calls as follows:

Established Diana Shipping Inc.(DSX) Covered Calls for Sep09:
08/24/09 Bought 300 DSX @ $13.52
08/24/09 Sold 3 DSX Sep09 $12.50 Calls @ $1.40

Diana Shipping(DSX) is a dry bulk cargo freight company with 19 carriers. The company is focused on transporting iron ore, coal, grain, and other bulk materials along worldwide shipping routes. DSX will be a beneficiary from any worldwide economic recovery. This Advisor believes a global recovery is now beginning but that the pace of improvement will be slow and also shallow. Consequently, a conservative in-the-money position was established with up to 7.5% [($13.52-$12.50)/$13.52] downside protection available while still achieving the maximum potential annualized return-on-investment of 39.5% from this covered calls position.

Below is the Covered Calls Advisor's 'Buy Alerts' spreadsheet for DSX. It scored above the minimum threshold of 20.0 with a Total Points rating of 21.58.






















Note: For expanded view, left click on the spreadsheet above.

Some potential results from this transaction are:
Absolute Return if Exercised at $12.50: +2.8%
= [($1.40-($13.52-$12.50)]/$13.52
Annualized Return If Exercised (ARIE): +39.5%
= {[($1.40-($13.52-$12.50)]/$13.52}*(365/26 days)

Downside Breakeven Price Point: $12.12
Downside Breakeven Protection: 10.4%

Synaptics Inc (SYNA) -- Closed

The Covered Calls Advisor Portfolio (CCAP) covered calls position in Synaptics Inc(SYNA) was closed out today (8/24/09). Synaptics' share price plunged almost 30% on 7/31 when the 4th quarter earnings report was released. Quarterly sales and earnings achieved expectations but sales guidance for the next quarter was 9.8% below analysts' projections which resulted in the dramatic price decline. The error made regarding this position was not waiting 8 days until after the earnings were released before deciding whether or not to establish the position. In the future when there is a pending earnings announcement, this advisor intends to wait until after the earnings release before deciding whether or not to establish a covered calls position.

The transactions history on this SYNA position was as follows:
07/23/09 Bought 300 SYNA @ $33.95
07/23/09 Sold 3 SYNA Aug09 $35.00 Calls @ $1.80
08/22/09 Aug09 Options Expired
08/24/09 Sold 300 SYNA @ $25.90

The overall performance results(including commissions) for the SYNA transactions were as follows:
Stock Purchase Cost: $10,193.95
($33.95*300+$8.95 commission)

Net Profit:
(a) Options Income: +$288.80 (300*$1.80 - $11.20 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation: -$2,423.95
= ($25.90-$33.95)*300 - $8.95 commissions

Total Net Profit: -$2,135.15
= (+$288.80 +$0.00 -$2,423.95)

Absolute Return = -20.9%
= -$2,135.15/$10,193.95

Annualized Return: -254.8%
= (-$2,135.15/$10,193.95)*(365/30 days)

Continuation Transaction -- Sohu.com

Last Friday was expiration Friday for August 2009. In a Covered Calls Advisor's blog recent post, it was noted that of the eight covered calls positions for August 2009, four were exercised and the stock was called away. The remaining four Aug09 positions expired out-of-the-money. Today it was decided to sell Synaptics(SYNA) and to retain Sohu.com(SOHU) and to establish a Sep09 covered calls position. No decision has been made yet regarding the other two holdings which are Aspen Insurance Holdings Ltd (AHL) and the U.S. Natural Gas Fund ETF (UNG).

The transactions history to date and the profit potential for the continuation covered calls position in SOHU is as follows:

Sohu.com Inc (SOHU) -- Continuation Transaction
The following transaction was made today to establish a covered calls position against the 400 shares owned in Sohu.com Inc (SOHU):
08/24/09 Sell-to-Open (STO) 4 SOHU Sep09 $65s @ $2.90

The transactions history to date is as follows:
05/19/09 Initial Stock Purchase Transaction -- Bought 400 SOHU @ $54.50
05/19/09 Inital Calls Sold Transaction -- Sold 4 SOHU Jun09 $55.00 Calls @ $3.00
A debit-spread transaction was executed as follows:
05/29/09 Buy-to-Close (BTC) 4 SOHU Jun09 $55s @ $5.84
05/29/09 Sell-to-Open (STO) 4 SOHU Jun09 $60s @ $2.51
Note: The price of SOHU was $59.85 today when the debit-spread was transacted.
06/03/09 Buy-to-Close (BTC) 4 SOHU Jun09 $60s @ $6.15
06/03/09 Sell-to-Open (STO) 4 SOHU Jun09 $65s @ $2.89
Note: The price of SOHU was $65.02 today when the debit-spread was transacted.
06/20/09 Jun09 Options Expired
06/24/09 Sell-to-Open (STO) 4 SOHU Jul09 $65s @ $2.85
Note: The price of SOHU was $64.60 today when the debit-spread was transacted.
07/18/09 Jul09 Options Expired
The price of SOHU closed at $62.00 on expiration Friday.
07/20/09 Sell-to-Open (STO) 4 SOHU Aug09 $65.00s @ $3.40
The price of SOHU was $63.80 today when this transaction was executed.
08/22/09 Aug09 Options Expired
The price of SOHU closed at $64.09 on expiration Friday.
08/24/09 Sell-to-Open (STO) 4 SOHU Sep09 $65.00s @ $2.90
The price of SOHU was $64.90 today when this transaction was executed.

The overall performance results(including commissions) for this SOHU covered calls position would be as follows:
Stock Purchase Cost: $21,808.95
($54.50*400+$8.95 commission)

Net Profit:
(a) Options Income: +$2,152.30
= (400*($3.00-$5.84+$2.51-$6.15+$2.89+$2.85+$3.40+$2.90) - 6*$11.95 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If stock price unchanged at $64.90): +$4,151.05
= ($64.90-$54.50)*400 - $8.95 commissions
(c) Capital Appreciation (If exercised at $65.00): +$4,191.05
= ($65.00-$54.50)*400 - $8.95 commissions

Total Net Profit(If stock price unchanged at $64.90): +$6,303.35
= (+$2,152.30 +$0.00 +$4,151.05)
Total Net Profit(If stock price exercised at $65.00): +$6,343.35
= (+$2,152.30 +$0.00 +$4,191.05)

Absolute Return if Stock Price Unchanged at $64.90: +28.9%
= +$6,303.35/$21,808.95
Annualized Return If Stock Price Unchanged (ARIU): +85.8%
= (+$6,303.35/$21,808.95)*(365/123 days)

Absolute Return if Exercised at $65.00: +29.1%
= +$6,343.35/$21,808.95
Annualized Return If Exercised (ARIE) +86.3%
= (+$6,343.35/$21,808.95)*(365/123 days)

August 2009 Expiration Transactions

The Covered Calls Advisor Portfolio (CCAP) contained a total of eight positions with August 2009 expirations, with the following results:
- Four positions (CHL, EME, HLF, and FXI) closed in-the-money. The calls were exercised and the stock was called away. The annualized percent return-on-investment(ROI) results for the four exercised positions were:

China Mobile Ltd. (CHL): +64.0%
EMCOR Group Inc (EME): +50.8%
Herbalife Ltd: +41.8%
iShares MSCI China Fund ETF (FXI): +29.6%

- Four positions in the CCAP (AHL,SOHU,SYNA, and UNG) ended out-of-the-money. Decisions will be made to either sell the equities, or to keep them and sell calls to establish Sep09 covered call positions. The related transactions will be made early next week and the actual transactions will be posted on this blog site on the same day they occur.

Detailed results for the four positions that were assigned (called away) upon Aug09 expiration are as follows:

1. China Mobile Ltd(CHL) -- Closed
The transactions history was as follows:
04/20/09 Initial Stock Purchase Transaction -- Bought 400 CHL @ $45.65
04/20/09 Inital Calls Sold Transaction -- Sold 4 CHL May09 $45.00 Calls @ $2.40
A debit-spread transaction was executed as follows:
05/06/09 Buy-to-Close (BTC) 4 CHL May09 $45s @ $3.70
05/06/09 Sell-to-Open (STO) 4 CHL May09 $50s @ $.65
Note: The price of CHL was $48.51 today when the debit-spread was transacted.
05/11/09 Ex-Div of $362.32($.9058 * 400 shares)
05/16/09 May09 Options Expired
Note: The closing price of CHL closed at $46.06 on expiration Friday.
05/18/09 Sell-to-Open (STO) 4 CHL Jun09 $50s @ $1.25
Note: The price of CHL was $47.30 today when the call options were sold.
06/20/09 Jun09 Options Expired
06/24/09 Sell-to-Open (STO) 4 CHL Jul09 $50s @ $1.75
The price of CHL was $49.75 today when this transaction was executed.
07/18/09 Jul09 Options Expired
The price of CHL closed at $49.81 on expiration Friday.
07/20/09 Sell-to-Open (STO) 4 CHL Aug09 $50s @ $2.50
The price of CHL was $50.95 today when this transaction was executed.
08/21/09 Aug09 Options Exercised (400 shares of CHL called away)
Note: Closing price of CHL was $51.87 on expiration Friday.

The overall performance results(including commissions) for the CHL transactions are as follows:
Stock Purchase Cost: $18,268.95
($45.65*400+$8.95 commission)

Net Profit:
(a) Options Income: +$1,880.25
= (400*($2.40-$3.70+$.65+$1.25+$1.75+$2.50) - 5*$11.95 commissions)
(b) Dividend Income: +$362.32 ($.9058 * 400 shares)
(c) Capital Appreciation (Stock exercised at $50.00): +$1,731.05
= ($50.00-$45.65)*400 - $8.95 commissions

Total Net Profit: +$3,973.62
= (+$1,880.25 +$362.32 +$1,731.05)

Absolute Return: +21.8%
= +$3,973.62/$18,268.95
Annualized Return: +64.0%
= (+$3,973.62/$18,268.95)*(365/124 days)


2. EMCOR Group Inc(EME) -- Closed
The transactions history was as follows:
06/17/09 Bought 500 EME @ $19.81
06/17/09 Sold 5 EME Jul09 $20.00 Calls @ $1.40
07/18/09 Jul09 Options Expired
The price of EME closed at $19.94 on expiration Friday.
07/20/09 Sell-to-Open (STO) 4 EME Aug09 $20s @ $1.30
The price of EME was $20.04 today when this transaction was executed.
08/21/09 Aug09 Options Exercised (400 shares of EME called away)
Note: Closing price of EME was $24.90 on expiration Friday.

The overall performance results(including commissions) for the EME transactions are as follows:
Stock Purchase Cost: $9,913.95
= ($19.81*500+$8.95 commission)

Net Profit:
(a) Options Income: +$824.60
= (500*($1.40+$1.30) - 2*$12.70 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Stock exercised at $20.00): +$86.05
= ($20.00-$19.81)*500 - $8.95 commissions

Total Net Profit(Stock exercised at $20.00): +$910.65
= (+824.60 +$0.00 +$86.05)

Absolute Return: +9.2%
= +$910.65/$9,913.95
Annualized Return: +50.8%
= (+$910.65/$9,913.95)*(365/66 days)


3. Herbalife Ltd.(HLF) -- Closed
The transactions history was as follows:
07/20/09 Bought 500 HLF @ $32.10
07/20/09 Sold 5 HLF Aug09 $30.00 Calls @ $3.32
08/21/09 Aug09 Options Exercised (500 shares of HLF called away)
Note: Closing price of HLF was $32.99 on expiration Friday.

The overall performance results(including commissions) for the HLF transactions were as follows:
Stock Purchase Cost: $16,058.95
($32.10*500+$8.95 commission)

Net Profit:
(a) Options Income: +$1,647.30
= (500*$3.32) - $12.70 commissions)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Stock exercised at $30.00): -$1,058.95
= ($30.00-$32.10)*500 - $8.95 commissions

Total Net Profit: +$588.35
= (+$1,647.30 +$0.00 -$1,058.95)

Absolute Return: +3.7%
= +$588.35/$16,058.95
Annualized Return: +41.8%
= (+$588.35/$16,058.95)*(365/32 days)


4. iShares MSCI China Fund ETF(FXI) -- Closed
The transactions history was as follows:
07/22/09 Bought 1000 FXI @ $40.44
07/22/09 Sold 10 FXI Aug09 $39.00 Calls @ $2.45
08/21/09 Aug09 Options Exercised (1000 shares of FXI called away)
Note: Closing price of FXI was $40.78 on expiration Friday.

The overall performance results(including commissions) for the FXI transactions were as follows:
Stock Purchase Cost: $40,448.95
($40.44*1000+$8.95 commission)

Net Profit:
(a) Options Income: +$2,433.55
= 1000*$2.45 - $16.45 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (Stock exercised at $39.00): -$1,448.95
= ($39.00-$40.44)*1000 - $8.95 commissions

Total Net Profit: +$984.60
= (+$2,433.55 +$0.00 -$1,448.95)

Absolute Return: +2.4%
= +$984.60/$40,448.95
Annualized Return: +29.6%
= (+$984.60/$40,448.95)*(365/30 days)

Returns -- Through July 2009

This report on the Covered Calls Advisor Portfolio (CCAP) performance results for the month of July 2009 were delayed a few days since I just returned from vacation. The results shown below are as of the market close on July 31st.

1. Month of July 2009 Result:

The Covered Calls Advisor Portfolio increased by 3.14% for the month of July 2009. In comparison, the benchmark Russell 3000 index (IWV) increased by 7.04% for the month.


2. Year-to-Date Through July 2009 Results:

The 2009 Year-to-Date results are as follows:

CCAP Absolute Return (Jan 1st through July 31, 2009) = +30.36%
= ($260,372.06 - $199,733.10)/$199,733.10

Benchmark Russell 3000(IWV) Absolute Return (Jan 1st through July 31,2009) = +10.88%
= ($57.66 - $52.00)/$52.00

For the first seven months of 2009, the table below shows that CCAP has outperformed the Russell 3000 benchmark by 19.47 percentage points (30.36% - 10.88%):














3. Prior Years Results:

The Covered Calls Advisor Portfolio (CCAP) was begun in September, 2007. The annualized returns achieved for 2007 and 2008 compared with the Russell 3000 benchmark results were as follows:









Note: This Covered Calls Advisor uses a bottom-line performance measure to determine overall portfolio investment performance results -- it is called 'Total Account Value Return Percent'. A simple example demonstrates how it is calculated:
If the total CCAP portfolio value was $100,000 at the beginning of the calendar year and $110,000 at the end of that year (and with no deposits or withdrawals having been made), then the 'Total Account Value Return Percent' would be +10.0% [($110,000-$100,000)/$100,000]*100.

Regards and Godspeed,

Jeff