ONXX BuyBack&Lower

Systematic Covered Writing

... more than just covered calls!

Buy Back & Lower Example

The Buy Back & Lower strategy is one to be used by those writers who are willing to increase the risk on a given position. It is an important Systematic Covered Writing strategy as it allows a writer to add additional cash to a position over the same period of time. Caution should be used, for if the stock appreciates above the lowered price, action will be needed to prevent the stock from being sold at the lower price. But . . . that's one of the reasons there is a Buy Back & Roll Out & Up strategy. So . . . this is the 'Do you feel lucky?' strategy for the SysCW process?

ONXX ONYX Pharmaceuticals Inc.

THE DATE: July 5, 2006

THE STOCK: ONYX Pharmaceuticals Inc. - (ONXX) This company discovers and develops novel cancer therapies and has proprietary technologies that target the molecular basis of cancer.

COMMENTARY: The Buy Back & Lower strategy was used in July2006, and as of December, it is looking like the price could have been set even lower!

			Systematic Covered Writing
			. . . More than just covered calls . . .
		SysCW Position Tracker

Historical Data			Open Positions
				Stock	Cash	Total Cash	Value as of
Date	Strategy	Status	Position	Investment	Generated	Generated	19-Dec-06
20-Sep-05	Initial Stock Purchase		Buy 100 ONXX @ 23.75	($2,382.00)			$1,055.00
Current Price		$10.55	Onyx Pharmaceuticals, Inc.
20-Sep-05	Initial Call Option		Sell May $22.50 call @ 5	Expired 5/20/06	$491.72
1-Jun-06	Appreciated Trade		Sell Jan $30 call 1.35		$126.74
5-Jul-06	Buy Back & Lower		Buy Jan $30 call @ .60		($68.25)
5-Jul-06	Continued Trade		Sell Feb $22.50 call @ 1.75		$166.74

Cash in Hand		30.10%				$716.95

It's now December and the stock is trading below $11. The extra $100 the was generated with the Buy Back & Lower is a bonus from the position. Given the current price, the position could use all the bonuses it can muster.

PLEASE NOTE THAT THIS EXAMPLE IS NOT TO BE CONSIDERED AS A RECOMMENDATION TO INVEST IN ONXX STOCK OR ANY OTHER EQUITY. THE INFORMATION IS PROVIDED FOR EDUCATIONAL PURPOSES ONLY. THERE IS NO GUARANTEE THAT SIMILAR TRANSACTIONS CAN BE EXECUTED IN THE FUTURE. INVESTING IN THE STOCK MARKET INVOLVES RISKS, DO SO ONLY WITH A KNOWLEDGE AND UNDERSTANDING OF THE RISKS INVOLVED!

The information provided above is for informational purposes only, and no mention of a particular security constitutes a recommendation to buy, sell, or hold that or any other security, or that any particular security, portfolio of securities, transaction, investment strategy is suitable for any specific person. You further understand that the Covered Writer will not advise you personally concerning the nature, potential, value or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. To the extent any of the information available on this website may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person. Always remember that past results are not necessarily indicative of future performance.

These are the terms of use. Why are they here? Because the examples provided are real. The transactions actually took place. The dates are real, the positions are real. Some transactions will have been executed on the day you receive the email. What you are agreeing to, is the fact that in no way is it being suggested that you can, or should, enter a similar position. Why? Because that would be providing investment advice and the Covered Writer is not authorized to do that. There is also no guarantee that similar transactions could be executed at any time in the future. Only licensed brokers are allowed to provide investment advice. Therefore, you are agreeing that the preceding example was provided for 'educational purposes' for the sole purpose of illustrating the Systematic Covered Writing strategies.

Thank you!