Wade's Amazing Option Trading Strategy

1) Buy relatively low cost options (i.e. stock is worth 20 to 100 times the price of the option).

2) Buy a basket of positions.

3) Try to stay diversified in your calls and puts within your basket.

4) Never sell a down position.

5) Be a contrarian as a buyer. Buy 'puts' when the market has been hot, and buy 'calls' when the market has been in the tank.

6) Be a contrarian as a seller. Sell 'calls' when the market has been hot, and sell 'puts' when the market has been in the tank. (opposite of previous rule)

7) Whenever your multiple (i.e. rate of return expressed as a whole number) doubles in a gap up or down, sell half your position and let the rest ride.

8) Try not to be overweight in any one particular position within your basket.

Rant - Why I Think Uranium Is Better Than Oil

My thinking is that sustained high uranium prices are more likely than sustained high oil prices.

How do I figure? Well, if oil prices stay high....uranium plants construction is sure to get even more hotter. If oil prices subside, well, uranium is still likely to stay high just due to the number of new plants that are already scheduled to come online. Also, think environment....greenhouse gas emissions...etc....only going to be talked about more and more as our planet melts.

So, how is the supply? As it turns out, the world doesn't have a lot of spare uranium supply floating around because so few companies produce it. There might be a lot of it in the ground....but it's hard to find and not enough people are looking now.

NKBS - Buy

Chart of NKBS as of Mar. 20, 2006

Purchase Price
$1.96 US

Company
Newtek Capital, Inc.
Newtek Capital, Inc. is a holding company for a network of partner companies that develop successful businesses in a number of existing as well as emerging, technological business lines.

Reason
Got a tip off a message board.

From clearstation.com....
From: lowpevaluation Mar 15 2006 12:37AM
Title: Rebound possible (Long Recommendation)
Company coming off 2 year downtrend. Insider buying picking up. Corporate just announced stock buyback. NKBS has market cap of $66M and net assets of $63M, with $56M in cash. I tend to agree with insiders and company purchasing it's shares, this looks like a good value.


Risk?
No idea. Medium??

ANSW (Nasdaq)- a.k.a., answers.com - Dog Alert

Live Chart of ANSW

Current Price
$13.77 US

Comments
If I had a margin account, I'd feel pretty comfortable shorting this one. This is answers.com, and if you've never heard of them, don't feel bad. Their core "competancy" is one-stop internet search (i.e. all info is assembled on one page, no surfing links).

The reality is......it's pretty much a shell around Wikipedia (and other sites of far lesser value). The funny thing is, they have to pay Wikipedia for the rights to show their content. The true value is in Wikipedia, not answers.com. (can i buy that please?)

This is a company built on hype. I still remember an article that came out asking the question, "Is Answers.com the next Google?". That one article basically made them.

They've had a year to come up with a real business plan while the hype lasted, and the best thing they've come up with is a natural language interface. I remember that idea from 1999.

I would've been a bit reluctant to short anything in the search realm six months ago. I think Google factor has made everyone reluctant to short it, especially with such a small market cap. But now as Google finally is showing signs of topping out, I don't think it's a risk anymore. Look for a delisting by the end of '06. :)

SOY.TO - Sell

Sell Price
$7.46 Cdn (post dated, I sold SOY three days ago)

See Buy For Company Info

Reason
I read three articles in a month about how soy products are either bad for you, or not beneficial. This article implied the FDA may force labelling changes.

I got scared out of the stock, but of course.......it's up 40 cents since I sold it. Have to learn to be more patient.

VRK.TO - Stock To Watch!

Chart as of Jan. 30, 2006

Current Price
$0.80 Cdn

Company
VIRTEK VISION
Develops, manufactures and markets precision laser technology systems for a broad range of applications principally for use in manufacturing facilities.

Why I'm watching?
This beleaguered little laser company from Waterloo has been in bad shape ever since the tech bubble burst in 2001. They tried to catch the biotech wave around 2000, developing a series of laser DNA readers, etc. Well, they spent a ton of money and developed some 3rd rate products....then the market tanked and they've been hurtin' ever since.

It's like the 16 year old who crashes his mom's car and works every weekend washing dishes to pay the parents back. Eventually, the kid is 25 and the debt is paid.

That's how I see Virtek. They have finally contained their horrible biotech mess, cut staff, cut costs, and gotten back to their core business........building lasers to help cut flat things into pieces.

It's not a great business, but then again, their market cap is quite the joke too. If you can grab some shares in the low 70 cent range....I believe you could double your investment in 6-9 months.

ZEN.TO - Stock To Watch !

Chart as of Jan. 24, 2006

Current Price
$17.56 Cdn

Company
ZENON ENVIRONMENTAL INC
ZENON is a technology company specializing in the design, development, manufacture and sale of advanced membranes and membrane systems for water purification, wastewater treatment and water reuse.

Why I'm watching?
This company had a sharp correction (due to a horrendous and unexpected 4th quarter) , but has a good business and will likely recover eventually (plus they are a takeover target).

Bad News   Good News

I'm not sure if now would be the time to get in....or maybe there is more bad news to come before things get better. I suspect all the bad news is out and priced into the stock. Might be worth taking a small position and see what happens....and buy more if it dips again.

TRE.TO - Sell

Chart of TRE as of Dec. 1, 2005

Sell Price
$3.81 Cdn (post dated, I sold TRE about a week ago)

See Buy For Company Info

Reason
I sold this little beauty because it had an incredible run, and it looked like the volumes were dropping off. In retrospect, it was a horrible decision as TRE was just taking a breather and continues to push higher thru $4.50 today. I completely underestimated how high it could go, I'm still not sure how a little forestry company could be so damn appealing! Good trade for me, nonetheless.

SOY.TO - Buy

Chart of SOY.TO as of Dec. 1, 2005

Purchase Price
$6.25 Cdn

Company
SunOpta Inc
Processing and packaging of organic food products and other non-genetically modified food products, particularly soy milk. Also into abrasives for industry, water filtration, and steam explosion technology.

Reason
The mid to low 4's never happened. After watching it go up 20% in the past 2+ months, I decided it was time to stop watching and actually buy some. Their cost cutting measures should start to affect the bottom line in the next couple of quarters, and hopefully mark the beginning of a turnaround. Big player in the US soy milk market, and that should continue to be a growth area.

Risk?
Risk is medium-high. Company has horrendous track record, and still has much reorganization to do of their many divergent businesses. Also affected by change in trends, and the health of overall economy as organic products could be considered luxury items.