Investment Enhancing Systems, Inc. – Covered Call Analyzer

Covered Call Analyzer CONSERVATIVE "STOCKS-TO-CONSIDER"

for February, 2007

NOTE: The markets took a big one day hit on February 27, 2007 and became very volatile in the weeks following. We did not panic sell at that time. Instead we held all stocks, even though some got close to or went below our get-out price of -15%. We continued to hold out stocks through expiration in March (the 17th) in anticipation (and hope) of some rebound.

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Company Name	Stock Symbol	Stock Price	# of shares	Total Cost*	Option Symbol	Mar Option Price	Income from sale*	Strike Price	Projected return if Called after one month*	Actual $ return*	Actual % Return*
NOVASTAR FINANCIAL	NFI	$17.19	500	$8,615	NFICX	$0.50	$233	22.5	32%	($4,287)	-50%
Comments:	Stock tanked on February 21, before the volatility period. We held the stock for five trading days (one week) anticipating a bounce and sold all shares at $8.15 on February 28 to close out position. Big negative hit that we will have to dig out of.
IMERGENT INC	IIG	$19.90	500	$9,970	IIGCX	$0.95	$458	22.5	17%	+$2,120	+21%
Comments:	Did not reach get-out price during volatility period. Not called in March. Price at $20.25 on 3/17/2007. Will now sell Apr22.5 at $0.80. Called in April at $22.50.
GEORGIA GULF CORP	GGC	$20.17	400	$8,088	GGCCX	$0.30	$104	22.5	12%	($1,040)	-13%
Comments:	Price dipped below the get-out price ($17.14), on March 13, but we did not sell. Not called in March. Price at $17.65. Will now sell Apr20 at $0.30. Note that we have lowered the strike price since it is very close to the purchase price. Exercised get-out price at $17.14 on March 28, 2007 after buying back calls at $0.05.
FREMONT GENERAL CORP	FMT	$13.72	700	$9,624	FMTCC	$0.35	$225	15	11%	($3,387)	-35%
Comments:	Stock tanked on February 28, during the volatility period. We held the stock for five trading days (one week) anticipating a bounce and sold all shares at $8.56 on March 7 to close out position. Another big negative hit that we will have to dig out of.
ILLUMINA INC.	ILMN	$36.81	200	$7,382	IQACH	$0.75	$137	40	10%	($970)	-13%
Comments:	Exercised get-out price at $31.29 (-15%) on March 5 after buying back calls at $0.05.
ISLE OF CAPRI CASINO	ISLE	$27.55	300	$8,285	QEPCF	$0.45	$121	30	10%	($1,283)	-15%
Comments:	Did not reach get-out price during volatility period. Not called in March. Price at $24.79 on 3/17/2007. Holding in March. Price at $26.69 on 4/21/2007. Continuing to hold. Exercised get-out price at $23.42 on May 16, 2007 after buying back calls at $0.5.
MARTEK- BIOSCIENCES CO	MATK	$23.28	400	$9,332	KQTCE	$0.65	$244	25	9%	($1,152)	-12%
Comments:	Did not reach get-out price during volatility period. Not called in arch. Price at $20.25 on 3/17/2007. Holding in March. Price at $22.92 on April 21. Continuing to hold in April. Exercised get-out price at $19.79 (-15%) after close on May 18, 2007.
TODCO	THE	$32.95	300	$9,905	THECG	$0.75	$211	35	8%	+$971	+10%
Comments:	Did not reach get-out price during volatility period. Not called in March. Price at $32.78 on 3/17/2007. Will now sell Apr35 at $0.60. Called in April at $35.00.
PRIDE INTERNATIONAL	PDE	$28.13	300	$8,459	PDECF	$0.45	$121	30	8%	+$872	+10
Comments:	Did not reach get-out price during volatility period. Not called in March. Price at $28.27 on 3/17/2007. Will now sell Apr30 at $0.75. Called in March at $30.00.
STANDARD PACIFIC CORP	SPF	$28.14	300	$8,462	SPFCF	$0.45	$121	30	8%	($1,145)	-17%
Comments:	Exercised get-out price at $23.92 (-15%) on March 5 after buying back calls at $0.05.
Income from sale of calls is +$2,631.
All Positions closed out in May, 2007. Cost of these ten (10) stocks is $88,122. Return from premiums and appreciation is ($9,608). Real return is -10.9% (($9,608)/$88,122). BAD MONTH

*After the effect of all commissions.

The stocks listed above are for illustrative and educational purposes only and should not be construed as an endorsement, recommendation, or solicitation to buy or sell any particular security.

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