TM

Lunch & Learn w/Options

February 15, 2013

Laurie ItkinThe Options Lady TM

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TERMS OF USE, DISCLAIMER, ASSUMPTIONOF RISK, & WAIVER OF LIABILITY

The Options Lady will not be held responsible for any trading losses you incur using the products or services associated with The Options Lady, including its website, this seminar, and all mentoring services. Trade at your own risk and only trade with capital you can afford to lose. You can lose money trading options and equities. Options trading has large potential rewards but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the options markets. This seminar is neither a solicitation nor an offer to buy or sell equities or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed in this webinar. The past performance of any trading system or methodology is not necessarily indicative of future results.

Disclaimer Any opinion expressed by Laurie Itkin in today’s seminar or products or services offered on The Options Lady website are not an inducement to make a particular investment or follow a particular strategy, but only as an expression of Laurie Itkin’s opinion. Past performance is not indicative of future results. The Options Lady does not guarantee any specific outcome or profit.

Assumption of Risk Covered call investing carries an inherent risk that some or all of an investment can be lost. There is no guarantee that using methods outlined by Laurie Itkin or The Options Lady will generate any profit whatsoever.

LIMITATION OF LIABILITYThis seminar is intended only to assist you in your financial organization and decision-making. Your personal financial situation is unique. Accordingly, before making any final decisions or implementing any financial strategy, you should consider obtaining additional information and advice from your accountant, tax advisor or other financial advisors who are fully aware of your individual circumstances.

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My Path to Options Trading

• Undergraduate finance degree from Wharton School of University of Pennsylvania

• Summer internship on the Chicago Board Options Exchange

• Bought first stock at age 24• 20-Year career in public policy and lobbying• Matured from “buy and hold” stock investor to

options trader• The Options Lady (coaching)• Series 65 investment advisor license• Coastwise Capital Group (money management)

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BUT AREN’T OPTIONS RISKY?

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Can’t Live Off Interest Anymore

Average RateCD/Money Market/Savings

Less than or close to 1%

Average Yield10-Year Bonds

Corporate Bonds: 2 - 6%Municipal Bonds: 2.5 – 5% (tax-exempt)

What will happen to price of bonds when interest rates begin to rise?

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Stock Market PerformancePast Ten Years

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S&P 500 fell 38% in 2008

Where was your financial

advisor?

What happened to

your nest egg?

TheLost

Decade?

Stock Market is VolatileBut Holds Growth Potential

theoptionslady.com2012 13.41%

CRASH

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Mutual Funds vs. Exchange Traded Funds

Mutual FundsExchange Traded Funds

(ETFs)

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Consider Covered Calls

WHAT• 100 shares of stock or ETF

combined with the sale of one call option

• Can enter from a cash position or by selling calls on stock you already own

WHY• More conservative than just

“buying & holding stock”• Ability to generate monthly

income to spend or compound• Creates a monthly “dividend”• Make money when underlying

stock is going up, stays flats, or even declines a bit

• Limits risk in case stock price falls

• Can be used in cash, margin or IRA accounts

• The downside? A cap on stock appreciation

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Monthly Income from Real Estate

Real Estate Investment1) Buy a house and make money if it goes up in value2) Rent out a house for income and make money if it goes up,

stays flat, or decreases slightly

Assume the Home is Worth $1M What if someone offers to pay you $100K for the right to buy

your home any time over the next 12 months for $1.2M?

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Monthly Income from Stock

Equity Investment1) Buy a “growth”/non-dividend paying stock and make

money if it goes up in value; or2) Buy a dividend-paying stock for income and make money if

it goes up, stays flat, or decreases slightly

Assume the Stock is Worth $10K What if you could receive $1K in exchange for the obligation to sell your stock anytime over the next 12 months for $12K?

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Return ScenariosReal Estate Investment Equity Investment

You are offered $100K for obligation to sell your $1M home anytime over the next 12 months for $1.2M.1.Value of house stays flat. You keep

$100K premium and still own home worth $1M for 10% annual gain.

2.Value of house falls to $900K or less. You keep $100K premium and still own your home. You either break even or lose less money than had you not made agreement.

3.Value of house increases beyond $1.2M and renter purchases home for $1.2M. You make 30% annual gain (20% on house + 10% on income premium).

You are offered $1K for obligation to sell your $10K worth of stock anytime over the next 12 months for $12K.1.Value of stock stays flat. You keep

$1K premium and still own stock worth $10K for 10% annual gain.

2.Value of stock falls to $9K or less. You keep $1K premium and still own stock. You either break even or lose less money than had you not entered into covered call.

3.Value of stock increases beyond $12K and call option buyer exercises his right to purchase stock for $12K. You made 30% annual gain (20% on stock + 10% on income premium).

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Made Money in Three WeeksEven Though Stock Stayed Flat

Bought 300 MDCO @ 29.86 Sold 3 MDCO Feb 29.0 Call @1.74

Sold 300 MDCO @ 29.98 Bought 3 MDCO Feb 16 29.0 Call @1.18

Profit after fees/commissions = $188 or 2% return in three weeks or 36% annualized return

Automate Your Call SelectionWith Born to Sell’s Trading Tool

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Sell Put Options for Income

Strategy

• Sell puts on a high quality stock you would like to own at a discount

• You are selling “insurance” to the holder of stock that bought puts for downside protection

Benefits

• If stock stays above strike price, you pocket the income which you can do month after month

• If stock gets “put” to you (which you then bought at a discount), you can sell calls to generate income each month

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Salesforce (CRM)Three Month Chart

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Monthly Income for Jan Put OptionDec 20 closing price - $168.91

$435$276$174

Monthly Returnif CRM > strike price

Annualized Return

435/16,500 = 2.6% 31.6%

276/16,000 =1.7% 21%

174/15,500 = 1.2% 14%

Selling a Put on CRMUsing TD Ameritrade

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Investing with The Options Lady

Do-It-Yourself

Open and fund TD Ameritrade

Trading Account

Three-Month Coaching Package

Full-Service

Transfer funds to Coastwise Capital Group

Investment advisors trade covered calls

for you

Free Guru Hours Every Mon

12:30-2:30