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[Weekend Summary]

Dear Member:

After closing out my long term position on EBAY early in the week, I really worked to find a trade, and only today, bought some deep in the money LEAPS calls on XLK. XLK is an ETF (Exchange Traded Fund) that represents the tech sector. Positions that encompass whole sectors like XLK generally do not have the risk of individual stocks and, therefore, are not as volatile. With the stock trading a little over 22, I bought the Jan '08 15 calls. I liked the deep in the money calls here since there was a delta of about .86 (the option price is expected to move about 86 cents for each dollar the stock moves) and I only paid a very small time premium (approximately $1.18) for nearly 21 months of time. Buying these deep in the money calls should also permit me to sell short term calls against my long position fairly quickly.

The short leg (Mar 200 calls) on BBH have ventured into profitable territory and are up about 60 cents a share since I opened that leg.

The straddles still aren't too exciting. Cardinal Health (CAH) essentially went sideways for the week though there is profit in the 70 call leg. Burlington Resources (BR) is doing the worst thing it can for a straddle -- it is flatlining and that results in both puts and calls just losing time value. Morgan Stanley (MS) was gracious enough to drop $1.11 for the week which doesn't hurt volatility and generally helps the put side of the straddle.

SPY essentially mimics the SP-500 and is having some trouble breaking resistance, but I like my Dec '07 120/140 spread since I already brought in some income and reduced risk.

I have a strong watchlist for next week, but will only act when I think there is a good reward to risk opportunity.

I'm looking forward to Saturday when I'll be engaging in some mock aerial dogfights in an old Navy T-34 training aircraft.

Have a super weekend.

Bill

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