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DAY 54

Update: Wednesday, 13-Apr-2005 7:51 PM

I wanted to take a moment to reflect on my "TEST" STEP building using an account that I have only for options trading.

Well, the process of using this account started off this year, and in January I opened positions in Apple options. They were all sold a few days before Apple split.

Then I moved to energy and options in LNG and OXY. The OXY options (calls) I had to sell at a small loss. This about 6% or so. However, the LNG options (puts) are doing much better and I think LNG has a lot more to go down. LNG will also split 2 for 1 in about a week -a bit more than that -and I feel then it's time to make that selling decision.

Anyway, I then used the money from the OXY options that I closed to open new positions in Apple.

I remember that last quarter the Wall Street pundits (the investment bankers making the predictions) were blowing away by Apple last quarter. I know that will happen again.

I have kept up my reading of what Apple is doing, and everything they make is going out the door. I's SOLD!

The iPOD is going into consumer history as the greatest product launch ever.

So, what will that do to Apple stock? Move it higher. I had predicted that Apple stock should be in the $110 area prior to the split. Now, pending that, I have purchased options that expire in July and October.

I should clarify the use of the word "purchased" with options. My brain is typing away and not thinking of the result. I am merely OPENING options positions in Apple and then later I will "CLOSE" the same positions to another buyer and I can get the cash. Which is always a 'good thing' in these instances.

Ok, now I have some Apple options. Do I hold them 'til Apple reaches pre-split $110.00? NO!

The reason for the purchase was to get a 100% or so return, ASAP.

In these types of instances I hope to make around 8 to 10 purchases annually with an attempt to get 100% return on EACH purchase. Not on an annual basis, but over a month or two!

Given that I am holding the options only for a month or two, this is by any measure a good return. Let me clarify that: It's a great return.

Now, given that I tend to be right about 4 out of 5 times, and IF I am wrong, I QUICKLY get out of the purchase. This is what happened with OXY options. The price of OIL would have had to go to the $60.00 a barrel range for me to cash out. I didn't see that happening anytime soon.

So, I took my loss. A small one at that. And got out.

One to the next... I am sure that will be Apple, as I have watched their progress closely.

So, there you are... That is what I have been testing and working on if WHEN the money comes thru from my 31-STEP Success Plan efforts.

As Abraham Lincoln once said 'prepare yourself, the time will come...' and while I wait, I keep testing the possibilities and they do very much exist.

Ok, that is a wrap. Back later or tomorrow. Good day. Sam.