Investment Enhancing Systems, Inc. – Covered Call Analyzer

Covered Call Analyzer CONSERVATIVE "STOCKS-TO-CONSIDER"

for July, 2007

NOTE: We had temporarily suspended out get-out rule (at -15%) between July 25 and September 22, 2007 because of the volatility in the markets. We have reinstated the get-out rule effective September 22 (expiration weekend). Any open positions on any list or portfolio will be sold if their price drops 15% below the stock price at September 22.

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Company Name	Stock Symbol	Stock Price	# of shares	Total Cost*	Option Symbol	Aug Option Bid Price	Income from sale*	Strike Price	Projected return if Called after one month*	Actual $ return*	Actual % Return*
BEAZER HOMES USA IN	BZH	$19.62	500	$9,830	BHZHE	$0.30	$133	25	29%	($5,080)	-52%
Comments:	Not called in August. Price at $11.09 on 8/18/2007. Will now sell Sep15 at $0.60. Note that we have lowered the strike price. Not called in September. Price at $10.06 on 9/22/2007. Will now sell Oct15 at $0.20. Exercised get-out price at $8.55 on September 25 after calling back calls at $0.05.
AMER HOME MORTGAGE I	AHM	$12.80	700	$8,980	AHMHC	$0.75	$505	15	23%	($8,080)	-90%
Comments:	This company went bankrupt as a result of the sub-prime mortgage blowup on August 10. This stock now trades with the symbol AHMMQ.PK . We will continue to hold this stock even though it has minimal value, to see if comes out of bankruptcy. Price at $0.40 at 8/18/2007. Price at $0.95 at 9/22/2007.Price at $0.50 at 10/20/2007. Sold all shares at $0.50 on November 6 to close out position.
NETFLIX INC.	NFLX	$19.63	500	$9,835	QNQHX	$0.45	$208	22.5	16%	+$713	+7%
Comments:	Not called in August. Price at $17.24 on 8/18/2007. Will now sell Sep20 at $0.20. Note that we have lowered the strike price. Not called in September. Price at $19.19 on 9/22/2007. Will now sell Oct20 at $0.55. Called in October at$20.00.
USEC INC.	USU	$19.52	500	$9,780	USUHX	$0.30	$133	22.5	16%	($5,010)	-51%
Comments:	Not called in August. Price at $14.31 on 8/18/2007. Will now sell Sep17.5 at $0.35. Note that we have lowered the strike price. Not called in September. Price at $10.40 on 9/22/2007. Will now sell Oct12.5 at $0.20. Exercised get-out price at $8.84 on October 8 after calling back calls at $0.05.
NETEASE.COM INC. -A	NTES	$17.87	500	$8,955	NQGHD	$0.25	$108	20	13%	($1,065)	-12%
Comments:	Not called in August. Price at $14.67 on 8/18/2007. Will now sell Sep15 at $0.60. Note that we have lowered the strike price. Called in September at $15.00.
GENERAL MARITIME COR	GMR	$27.07	300	$8,141	GMRHF	$0.25	$61	30	11%	($670)	-8%
Comments:	Not called in August. Price at $23.86 on 8/18/2007. Will now sell Sep25 at $0.70. Note that we have lowered the strike price. Not called in September. Price at $27.98 on 9/22/2007. Will now sell Oct30 at $0.25. Not called in October. Price at $26.06 on 10/20/2007. Will now sell Nov30 at $0.15. Stock price hit get out price of $23.78 during expiration week. Rather than buying back calls, we held the stock until after expiration and then sold all shares at $23.68 to close out position.
SFQ	SHFL	$15.91	600	$9,566	SFQHW	$0.50	$184	17.5	11%	($1,505)	-16%
Comments:	Not called in August. Price at $15.18 on 8/18/2007. Will now sell Sep17.5 at $0.25. Not called in September. Price at $14.30 on 9/22/2007. Will now sell Oct17.5 at $0.40. Not called in October. Price at $14.08 on 10/20/2007. Will now sell Nov15 at $0.30. Note that we have lowered the strike price. Exercised get-out price at $12.16 on November 5 after calling back calls at $0.05.
MASCO CORPORATION	MAS	$27.53	300	$8,279	MASHF	$0.50	$136	30	10%	($872)	-11%
Comments:	Not called in August. Price at $26.30 on 8/18/2007. Will now sell Sep30 at $0.35. Not called in September. Price at $23.87 on 9/22/2007. Sold all shares at $23.87 to close out position.
K-SWISS INC.	KSWS	$24.51	300	$8,273	SWUHF	$0.35	$91	30	10%	($2,064)	-25%
Comments:	Not called in August. Price at $24.64 on 8/18/2007. Will now sell Sep25 at $0.90. Note that we have lowered the strike price. Not called in September. Price at $22.67 on 9/22/2007. Will now sell Oct25 at $0.25. Not called in October. Price at $20.68 on 10/20/2007. Will now sell Nov25 at $0.15. Exercised get-out price at $19.27 on November 5 after calling back calls at $0.05.
CRYPTOLOGIC INC.	CRYP	$23.21	400	$9,304	UFWHE	$0.35	$124	25	9%	($852)	-9%
Comments:	Not called in August. Price at $20.89 on 8/18/2007. Will now sell Sep22.5 at $0.60. Note that we have lowered the strike price. Not called in September. Price at $20.95 on 9/22/2007. Will now sell Oct22.5 at $0.40. Not called in October. Price at $21.68 on 10/20/2007. Will now sell Nov22.5 at $0.25. Exercised get-out price at $19.73 on November 1 after calling back calls at $0.05.
Income from sale of calls is +$4,494.
All positions Closed out in November. Cost of these ten (10) stocks is $90,943 Return from premiums and appreciation at ($24,510). Real return is -26.9% (($24,510)/$90,943)

*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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