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Portfolio Review

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Growing Pains!

As many of you know, the recent change of (parent company) ownership has taken us from a subscriber base that was generally well-versed in all forms of option trading to a relatively inexperienced cadre of market participants. While the new interest is much appreciated, it has obviously caused some growing pains with regard to the products we publish and we are slowly realizing that we can't do business as usual.

For example, we have already received a new question about closing the VIP position, even though we previously outlined a number of common strategies for exiting (or adjusting) a credit spread. In addition, one of our readers said we should be covering all of the plays listed in the newsletter, even if they are not recommended for the (model) portfolio. Another subscriber asked why a position; specifically RIMM - Research In Motion, might not be included in the portfolio if it could be offered as a spread candidate to the average trader. All of these comments have valid responses but rather than argue our case, we thought it might be better to consider the needs of our new members and attempt to structure the MCM Portfolio based on their experience level. With this objective in mind, we are going to try some different tactics for the next few weeks and see which approach garners more favor from the readership.

First, the older plays in XAU and GOOG will receive regular analysis and commentary in the newsletter Blogs, and the new position in Research In Motion will be added to the model portfolio. Next, there will be fewer "bonus" or "supplemental" plays and we will limit our research (market-permitting) to a range of data which yields only positions that can be included in the model portfolio. Finally, we will utilize a more conservative approach in our recommended trading techniques and focus on relatively simple strategies to manage the portfolio. While this will entail closing a few spreads earlier than expected, it should not be detrimental to more experienced traders as they can continue to pursue individual methods for any necessary exits or adjustments. In this manner, we hope to improve the content for everyone who reads the newsletter.

MCM Staff

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