The document discusses the potential profit opportunities available from trading exchange-traded funds (ETFs). It states that select groups of traders have quietly earned ETF profits for over a decade and the author will provide a blueprint to help readers do the same. The blueprint will educate readers on specialized ETF strategies, how to double profits with less effort using certain ETFs, and how to generate profits from ETFs held in retirement accounts. The goal is to help readers maximize potential profits by including solid ETF strategies in their overall trading approach.

2. Underground
ETF
Profit
Blueprint
SPECIAL
NOTE:
We
are
on
the
verge
of
an
unprecedented
explosion
of
potential
trading
a
group
of
funds
that
have
largely
remained
ignored
by
the
“mainstream”
since
their
inception.
I’m
talking
about
Exchange
Traded
Funds,
or
ETFs.
Don’t
worry
if
you’ve
never
heard
of
ETFs,
because
when
you’re
done
with
this
report,
here’s
what
you’ll
learn:
 How
select
groups
of
traders
have
been
quietly
padding
their
portfolios
with
ETF
profits
for
over
a
decade,
and
how
you
can,
too.
 How
you
can
get
an
unfair
head
start
using
specialized
ETF
strategies
before
the
“mainstream”
catches
on.
Don’t
worry,
it’s
entirely
legal.
 How
to
double
your
profit
potential
with
half
the
effort
by
harnessing
a
special
kind
of
ETF
designed
to
pad
your
portfolio
when
the
market
tanks.
 How
to
finally
let
your
IRA
siphon
profit
potential
out
of
bear
runs.
This
little-­‐
known
technique
essentially
lets
your
IRA
flex
its
muscles
for
the
first
time
ever
as
you
trade
it
almost
like
a
regular
brokerage
account.
 …and
a
TON
more.
The
bottom
line
is
that
no
matter
what
you
trade
–
stocks,
forex,
futures,
options
–
you
are
leaving
a
ton
of
profit
potential
on
the
table
if
you
aren’t
including
a
solid
ETF
strategy
in
your
trading
“toolkit”.
My
goal
with
this
report
is
to
give
you
a
clear
blueprint
to
make
you
deadly
knowledgeable
about
ETFs
so
you’re
well-­‐
prepared
to
pounce
on
as
much
ETF
profit
potential
as
you
can
handle.
What
you
are
about
to
read
is
more
valuable
to
you
than
what
you
will
find
in
many
trading
courses
and
high-­‐priced
seminars.
This
is
a
HUGE
report.
Take
your
time
to
read
it
all.
Good
Trading,
Bill
Poulos
Copyright
©
Profits
Run,
Inc.
www.profitsrun.com
Page
2
of
39

3. Underground
ETF
Profit
Blueprint
PLEASE
PRINT
THIS
REPORT
NOW!
Please
take
a
few
seconds
and
print
this
entire
report
right
now.
Here’s
why:
 When
you
print
this
report
out,
the
chances
that
you’ll
actually
read
it
and
learn
something
new
about
trading
the
ETF
markets
will
increase
dramatically.
I
have
a
collection
of
digital
reports
on
my
computer,
and
the
only
ones
I’ve
read
all
the
way
through
are
the
ones
I’ve
printed
out.
 When
you
print
this
report
out,
you
can
read
it
anywhere
in
your
house
(or
on
the
road,
for
that
matter).
I
love
my
family,
but
my
home
office
is
smack
dab
in
the
middle
of
the
house,
so
it’s
a
high
traffic
area.
Sometimes
the
only
way
I
can
get
a
solid
chunk
of
time
to
read
something
I
find
online
is
if
I
print
it
out
and
take
it
somewhere
else
in
the
house.
 There
is
an
activity
in
this
report
that
requires
you
to
answer
some
questions.
The
impact
of
this
activity
will
be
much
greater
if
you
actually
get
out
a
pencil
or
pen
and
actually
write
on
this
report.
I
highly
recommend
you
spend
some
quality
time
completing
this
activity.
Your
future
could
depend
on
it.
Copyright
©
Profits
Run,
Inc.
www.profitsrun.com
Page
3
of
39

4. Underground
ETF
Profit
Blueprint
Disclaimer:
Stock,
forex,
futures,
and
options
trading
is
not
appropriate
for
everyone.
There
is
a
substantial
risk
of
loss
associated
with
trading
these
markets.
Losses
can
and
will
occur.
No
system
or
methodology
has
ever
been
developed
that
can
guarantee
profits
or
ensure
freedom
from
losses.
No
representation
or
implication
is
being
made
that
using
the
information
in
this
special
report
will
generate
profits
or
ensure
freedom
from
losses.
Revision
01-­‐20080314.
In
This
Report
On
The
Verge
Of
The
ETF
Explosion
........................................................................
6
What
is
an
ETF?
.....................................................................................................
11
Are
ETFs
only
traded
on
U.S.
stock
exchanges?
....................................................
13
What
is
the
advantage
of
trading
ETFs
as
opposed
to
the
trading
some
of
the
securities
in
the
ETF
directly?
................................................................................
14
What
brokers
are
suitable
for
ETF
trading?
...........................................................
14
Where
can
I
find
a
list
of
all
ETFs?
.........................................................................
15
Do
ETFs
pay
dividends?
.........................................................................................
15
Do
ETFs
have
taxable
distributions
like
mutual
funds?
.........................................
16
Are
ETFs
only
suitable
for
people
with
big
accounts?
...........................................
16
How
do
I
know
which
ETFs
to
buy?
.......................................................................
17
With
the
technical
analysis
approach
to
trading
ETFs,
how
long
do
I
stay
in
a
position?
................................................................................................................
18
Which
is
a
better
trading
approach
with
ETFs:
fundamental
or
technical
analysis?
...............................................................................................................................
20
Can
you
day
trade
ETFs?
........................................................................................
21
Copyright
©
Profits
Run,
Inc.
www.profitsrun.com
Page
4
of
39

5. Underground
ETF
Profit
Blueprint
What
is
the
best
risk
management
strategy?
........................................................
22
How
do
I
manage
my
account
from
a
portfolio
standpoint
with
ETF
swing
trading?
...............................................................................................................................
23
Are
all
ETFs
appropriate
for
trading?
.....................................................................
24
Can
I
trade
ETFs
inside
an
IRA?
..............................................................................
26
Can
you
elaborate
on
the
various
types
of
ETFs
available?
..................................
26
Can
I
apply
stock
swing
trading
methods
to
swing
trading
ETFs?
.........................
28
Can
I
trade
options
with
ETFs?
..............................................................................
31
Can
you
elaborate
on
trading
ETF
options
and
what
is
the
best
ETF
options
strategy?
................................................................................................................
32
Why
Are
You
Interested
In
Supercharging
Your
Portfolio?
...................................
35
ETF
Survey
Summary
.............................................................................................
38
Copyright
©
Profits
Run,
Inc.
www.profitsrun.com
Page
5
of
39

6. Underground
ETF
Profit
Blueprint
On
The
Verge
of
the
ETF
Explosion
Dear
Trader,
We
are
on
the
verge
of
an
“explosion”
in
the
markets
that
you
may
never
see
again
in
your
lifetime.
For
over
a
decade,
select
groups
of
seemingly
“stealth”
traders
have
been
quietly
padding
their
portfolios
with
profits
pulled
directly
out
of
specialized
types
of
trading
funds.
Now,
to
be
clear,
these
funds
haven’t
intentionally
been
kept
secret,
nor
do
you
need
special
access
or
accredited
investor
status
to
trade
them.
However,
these
funds
have
remained
pretty
much
treated
as
a
“curiosity”
by
the
“mainstream”
investing
and
trading
communities.
But
that’s
all
changing,
and
it’s
still
not
too
late
to
get
your
share
of
the
“goodies”
and
add
a
new
“profit
pipeline”
to
your
portfolio.
The
information
in
this
report
has
the
potential
to
dramatically
increase
the
profits
you
add
to
your
trading
portfolio,
and
it
really
does
have
the
potential
to
change
your
life.
That’s
not
hype,
because
the
potential
is
real.
It’s
up
to
you
to
make
it
happen,
and
with
this
“blueprint”
I
want
to
show
you
the
quickest
path
to
joining
this
somewhat
“insiders”
club
of
quiet
traders
who’ve
been
enjoying
these
funds
for
years.
Now,
I
don’t
think
the
traders
already
“in
the
know”
are
going
to
be
too
happy
about
the
fact
that
I’m
sharing
this
knowledge.
After
all,
if
you
had
a
technique
that
you
might
call
a
“portfolio
supercharger”,
would
you
want
others
to
know
about
it?
I
didn’t
think
so!
Copyright
©
Profits
Run,
Inc.
www.profitsrun.com
Page
6
of
39

7. Underground
ETF
Profit
Blueprint
But
I’m
not
concerned
with
what
others
think.
It’s
often
been
said
that
if
you’re
not
ruffling
a
few
feathers,
you’re
probably
not
doing
a
good
job.
And
I’m
pretty
good
at
ruffling
feathers,
especially
those
belonging
to
the
“big
shots”
in
the
mainstream
investment
world.
You
know
the
type…
the
smug
“gurus”
who
look
good
on
TV
or
have
an
entertaining
shtick,
but
don’t
ever
speak
in
clear
language
or
give
step-­‐by-­‐step
techniques
that
regular
people
like
you
and
I
can
understand
or
use.
Well,
since
I
began
trading
way
back
in
1974,
I’ve
been
on
a
personal
mission
to
make
trading
as
profitable
and
as
simple
as
possible,
even
if
it
goes
against
convention
or
“what’s
popular”.
And
since
I
started
teaching
people
from
all
over
the
world
how
to
trade
back
in
2001,
my
suspicions
that
folks
wanted
clear
and
simple
trading
ideas
have
been
confirmed
many
thousands
of
times
over.
One
final
word
before
I
dive
into
what
I
feel
is
the
best
and
quickest
way
to
unplug
profit
potential
from
these
amazing
funds…
I
might
come
across
as
a
little
harsh
in
this
report,
but
I’m
a
plain-­‐speaking
person
and
I
don’t
believe
in
sugar-­‐coating
anything
or
misleading
you
with
false
hopes.
I
just
don’t
think
that’s
fair,
especially
when
it
comes
to
your
hard-­‐
earned
money.
There
are
plenty
of
swindlers
out
there
doing
that
already.
So
you’ll
get
the
bare
facts
from
me,
like
‘em
or
not,
so
you’re
empowered
to
take
action
and
make
positive
decisions
on
how
to
succeed
in
the
markets.
Copyright
©
Profits
Run,
Inc.
www.profitsrun.com
Page
7
of
39

8. Underground
ETF
Profit
Blueprint
Introducing
Exchange
Traded
Funds
So,
the
funds
that
I’m
talking
about
here
are
called
Exchange
Traded
Funds,
or
ETFs.
These
funds
have
been
hailed
as
a
godsend
by
traders
that
truly
“get
it”
and
understand
all
their
tremendous
advantages.
(And
you’ll
be
among
those
traders,
too,
after
you
read
this
report.)
If
you’re
already
familiar
with
ETFs
you
might
be
scratching
your
head
and
wondering
what
the
big
deal
is.
Well,
in
my
research
into
ETFs
over
the
years,
I
made
a
few
astonishing
discoveries
that
I’ll
share
with
you
a
little
later.
But
the
short
answer
is
that:
Most
traders
that
are
familiar
with
ETFs
don’t
have
a
clue
how
to
truly
maximize
their
profit
potential,
and
have
been
trying
to
trade
them
the
absolute
wrong
way.
You’ll
see
what
I
mean
as
I
peel
back
the
layers
of
ETFs
and
give
you
the
solid,
factual
insights
you’ll
need
to
succeed
in
these
the
markets
the
same
way
those
“underground”
traders
have
been
doing
it
for
years…
right
under
the
noses
of
the
“mainstream”
trading
community.
Three
Years
of
Begging
&
Pleading
For
at
least
three
years
now,
my
students
and
readers
have
been
begging
and
pleading
with
me
to
show
them
a
good
way
to
trade
ETFs
and
work
them
into
their
overall
portfolio.
There’s
something
peculiar
about
the
ETF
markets,
which
you’ll
learn
here
shortly
–
my
readers
noticed
it,
too,
and
that’s
one
of
the
reasons
they
were
looking
for
my
help.
Copyright
©
Profits
Run,
Inc.
www.profitsrun.com
Page
8
of
39

9. Underground
ETF
Profit
Blueprint
During
my
ETF
research,
I
found
that
more
and
more
traders
are
beginning
to
“see
the
light”
about
the
advantages
and
tremendous
profit
potential
trading
these
funds.
I
even
stumbled
upon
a
few
good
trading
ideas.
However,
I
noticed
there
was
essentially
a
vacuum
of
good
trading
methods
designed
specifically
for
ETFs.
And
even
those
that
I
did
find
were
mostly
incomplete,
leaving
you
to
figure
out
the
rest
on
your
own.
How
frustrating!
As
I
began
to
piece
together
the
true
“behind
the
scenes”
story
of
the
ETF
puzzle,
I
decided
that
instead
of
answering
my
readers’
questions
one
at
a
time,
I
needed
to
put
together
a
comprehensive
report
that
told
the
truth
about
the
best
ways
to
pull
profits
out
of
the
ETF
markets.
But
to
make
sure
I
didn’t
leave
out
any
major
concerns
or
questions,
I
sent
an
official
survey
to
about
100,000
traders
and
asked
them
one
question:
What’s
your
#1
question
about
trading
ETFs?
I’ve
used
this
simple
survey
technique
in
the
past
and
it’s
really
helped
me
dig
out
the
core
concerns
most
of
my
readers
have
about
any
topic.
Terror
&
Excitement
This
time
was
no
different.
I
got
deluged
with
questions
and
felt
a
tinge
of
terror
for
a
second
as
I
wondered
what
I
had
gotten
myself
into.
There
was
no
way
I
could
answer
all
those
questions,
I
thought.
But
things
simmered
down
when
I
Copyright
©
Profits
Run,
Inc.
www.profitsrun.com
Page
9
of
39

10. Underground
ETF
Profit
Blueprint
realized
that
they
quickly
fell
into
categories
and
a
core
set
of
common
questions
emerged.
If
you’ve
read
my
special
reports
I’ve
published
in
the
past
about
stocks
and
forex,
then
you
know
what’s
coming
next…
The
top
questions
I
got
synced
up
almost
perfectly
with
the
research
and
testing
I’d
been
immersed
in.
So
I
was
super
excited
because
I
knew
I
could
help
all
my
readers
out,
and
almost
immediately.
So
that
brings
us
the
report
you’re
looking
at
now,
the
Underground
ETF
Profit
Blueprint.
It
is
my
sincere
hope
that
this
finds
its
way
into
the
homes
of
as
many
traders
as
possible
that
are
ready
to
make
a
positive,
profitable
addition
to
their
trading
portfolios.
Are
you
ready?
Let’s
begin.
Copyright
©
Profits
Run,
Inc.
www.profitsrun.com
Page
10
of
39

11. Underground
ETF
Profit
Blueprint
What
is
an
ETF?
ETF
stands
for
Exchange
Traded
Fund.
ETFs
are
a
very
exciting
and
fast-­‐growing
segment
of
the
investment
industry
and
appear
destined
to
replace
mutual
funds
as
the
preferred
vehicle
for
fund
investing.
They
have
been
available
since
the
early
90’s
but
are
now
growing
at
a
geometric
rate
as
more
and
more
investors
and
traders
become
aware
of
the
profit
potential
awaiting
them
with
ETFs.
An
ETF
is
a
fund
comprised
of
a
group
of
stocks,
bonds,
or
other
investment
vehicles
similar
to
a
mutual
fund.
However,
unlike
a
mutual
fund,
ETFs
trade
like
stocks
allowing
a
trader
to
buy
and
sell
during
normal
exchange
trading
hours.
(See
Figure
1,
below,
for
a
daily
bar
chart
of
a
typical
ETF
using
Trade
Navigator
charting
software.)
That
means
you
can
have
immediate
access
to
your
funds
upon
selling
an
ETF
position
during
normal
market
hours
anytime
you
want.
In
addition,
ETFs
are
generally
more
cost
and
tax
efficient
than
mutual
funds.
Figure
1
–
EEM:
iShares
MSCI
Emerging
Index
Fund
Copyright
©
Profits
Run,
Inc.
www.profitsrun.com
Page
11
of
39

12. Underground
ETF
Profit
Blueprint
However,
when
trading
ETFs,
there
is
a
commission
cost
the
same
as
you
would
have
when
trading
stocks.
There
are
no
minimum
buy
requirements
or
holding
period
requirements
common
to
many
mutual
funds.
In
fact
you
can
buy
as
little
as
1
share
of
an
ETF
as
you
would
buy
1
share
of
a
stock.
And
so
ETFs
are
an
excellent
trading
vehicle
whereas
mutual
funds
are
not.
So
that
means
you
can
get
the
diversification
that
a
fund
has
to
offer
with
giving
up
the
ability
to
trade
in
and
out
of
the
fund.
This
is
a
big
deal,
because
you
can
virtually
eliminate
stock
specific
risk
by
trading
a
basket
of
stocks
within
the
fund
so
that
if
one
stock
in
the
fund
suddenly
drops
in
price,
the
negative
impact
on
a
position
you
may
have
in
the
fund
would
be
far
less
than
if
you
had
owned
a
position
in
the
shares
of
that
particular
stock.
There
are
many
different
types
of
funds
available,
in
fact
in
the
United
States
alone
there
are
now
over
600
funds
currently,
and
more
are
being
added
each
day.
ETFs
include
stock
sector,
country,
currency,
commodity,
bond
or
other
investment
objective
related
funds.
In
addition,
there
are
funds
that
have
only
short
positions
and
are
sometimes
referred
to
as
“short”
funds,
or
“short
ETFs”,
which
will
increase
in
price
as
the
short
positions
they
hold
go
down
in
price.
Some
funds
are
leveraged
funds,
meaning
that
when
the
stocks
in
their
funds
go
up
by
say
5%,
the
fund
could
go
up
by
10%
and
short
funds
whose
stocks
go
down
in
price
by
say
5%,
could
go
down
10%.
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13. Underground
ETF
Profit
Blueprint
ETFs
are
also
a
growing
investment
vehicle
in
international
stock
markets
as
well.
A
prospectus
on
each
ETF
is
available
and
information
on
the
individual
holdings
of
an
ETF
can
be
found
on
Yahoo
Finance
and
other
financial
related
websites.
However,
not
all
ETFs
are
suitable
for
trading
as
many
are
thinly
traded
or
too
volatile
to
be
considered
good
swing
trading
vehicles.
ETFs
in
the
U.S.
are
created
and
maintained
by
sponsor
companies
subject
to
the
approval
and
regulation
of
the
Securities
and
Exchange
Commission.
Are
ETFs
only
traded
on
U.S.
stock
exchanges?
No,
not
at
all.
ETFs
are
also
traded
on
stock
exchanges
around
the
world,
such
as
the
London,
Toronto,
and
Australian
stock
exchanges.
These
exchanges
are
approving
new
ETFs
at
a
rapid
pace
as
they
follow
a
similar
growth
curve
as
in
the
US.
In
addition
to
the
major
exchanges
mentioned
above,
ETFs
are
also
available
in
the
following
markets:
 India
 Sweden
 Finland
 Singapore
 Hong
Kong
 South
Korea
 Japan
 Turkey
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14. Underground
ETF
Profit
Blueprint
What
is
the
advantage
of
trading
ETFs
as
opposed
to
the
trading
some
of
the
securities
in
the
ETF
directly?
Simply
put,
it
is
diversification.
Let’s
say
you
feel
that
oil
and
gas
stocks
are
a
good
buy,
but
are
concerned
about
buying
just
one
or
two
companies
that
could
face
an
unexpected
downturn
in
price
due
to
some
specific
company
related
problem.
By
buying
an
oil
and
gas
related
ETF
instead
you
dramatically
minimize
the
stock
specific
risk
because
you
are
buying
a
basket
of
stocks
not
just
one
or
two.
Another
example,
let’s
say
you
feel
that
the
US
dollar
will
continue
to
weaken
against
the
Euro,
you
could
buy
an
ETF
fund
that
holds
Euro
denominated
assets
instead
of
buying
a
forex
or
futures
position.
What
brokers
are
suitable
for
ETF
trading?
Most
if
not
all
online
or
discount
brokers
(regulated
by
their
country’s
regulatory
body)
that
are
suitable
for
stock
trading
are
also
suitable
for
ETF
trading.
The
broker
treats
them
both
the
same,
since
ETFs
trade
just
like
stocks.
It
is
a
good
idea
to
use
one
of
these
brokers
to
minimize
transaction
costs
(commissions)
when
trading
ETFs.
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15. Underground
ETF
Profit
Blueprint
Where
can
I
find
a
list
of
all
ETFs?
Most
good
stock
charting
software
packages
also
include
an
ETF
list
as
well
as,
of
course,
the
price
charts
for
each
of
the
listed
ETFs.
See
Figure
2,
below,
for
an
example.
Also,
financial
newspapers
are
a
good
source
as
well
as
many
online
services.
Figure
2
–
TeleChart
ETF
List
Do
ETFs
pay
dividends?
As
a
general
rule,
yes.
When
the
companies
owned
by
the
ETF
pay
dividends,
the
ETF
shareholders
are
entitled
to
those
dividends.
However,
ETFs
pay
out
those
dividends
according
to
different
schedules.
Some
pay
when
one
of
their
company
holdings
pays,
others
pay
quarterly,
others
according
to
various
schedules.
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16. Underground
ETF
Profit
Blueprint
Do
ETFs
have
taxable
distributions
like
mutual
funds?
Some
ETFs,
on
occasion,
do
have
capital
gains
distributions
but
only
for
extenuating
circumstances.
As
a
rule
most
ETFs
do
not
make
capital
gains
distributions
because
they
do
not
have
to
sell
stocks
in
the
fund
to
redeem
shares.
So,
essentially,
the
tax
implications
of
trading
ETFs
are
the
same
as
for
trading
stocks.
Are
ETFs
only
suitable
for
people
with
big
accounts?
In
practice,
you
can
buy
as
little
as
1
share
of
an
ETF
so
there
is
no
minimum
account
size
per
se
required
to
trade
ETFs,
unlike
the
case
for
many
mutual
funds.
However
each
individual
must
assess
their
own
financial
circumstances.
A
common
circumstance
is
that
many
beginning
traders
want
to
learn
how
to
trade,
but
have
limited
cash
for
trading.
The
advice
I
always
give
is
to
learn
how
to
trade
first,
learn
and
master
a
good
trading
method,
practice
it
over
and
over
again
with
paper
trading.
You
will
then
own
the
method
for
life.
That
is
a
big
deal
that
gives
you
an
edge
in
the
markets
that
most
others
don't
have.
Then
when
the
cash
becomes
available,
you
will
be
ready.
People
with
IRAs
or
other
investment
accounts
may
want
to
follow
a
strategy
of
allocating
a
portion
of
their
account
to
ETF
trading
to
have
the
potential
of
supercharging
the
returns
on
the
total
account.
And
others
may
elect
to
trade
the
entire
account.
Again,
each
individual
must
assess
their
own
financial
circumstances.
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17. Underground
ETF
Profit
Blueprint
How
do
I
know
which
ETFs
to
buy?
Like
you
do
with
stocks,
you
have
at
least
a
couple
of
broad
choices
to
choose
from.
One
is
you
determine
what
to
buy
with
fundamental
analysis.
And
the
other
is
with
technical
analysis.
And
a
third
would
be
a
combination
of
the
two.
With
fundamental
analysis
you
are
trying
to
analyze
economic
factors,
financial
performance,
competitive
strengths
and
weaknesses,
growth
rates,
threats
to
the
business,
and
so
on
of
the
units
(stocks,
bonds,
etc)
held
by
the
fund.
And
from
that
analysis
select
the
best
funds
to
buy.
Another
fundamental
strategy
is
to
switch
in
and
out
of
different
ETFs
on
a
rotational
basis
to
those
that
appear
to
be
the
leaders
at
any
point
in
time.
Most
fundamental
approaches
to
investing
in
ETFs
include
a
buy
and
hold
kind
of
strategy
where
you
are
always
100%
invested.
One
of
the
big
problems
with
this
approach
is
a
long
portfolio
of
ETFs
will
get
hammered
in
a
bear
market
and
take
possibly
years
to
recover
to
the
initial
investment
level,
no
different
than
would
be
the
case
for
individual
stock
or
bond
trading.
With
technical
analysis
you
are
trying
to
analyze
the
action
of
the
ETF
share
prices
using
trendlines,
support
and
resistance
levels,
moving
averages,
and
countless
other
price
related
indicators
to
determine
good
trading
opportunities.
Technical
analysis
is
based
on
the
belief
that
all
fundamentals
are
already
comprehended
in
the
price
of
the
shares
and
so
an
analysis
of
price
is
all
that
is
required
to
make
trading
decisions.
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18. Underground
ETF
Profit
Blueprint
Most
technical
analysis
approaches
involve
trading
in
and
out
of
ETFs
for
a
relatively
short
time
frame
rather
than
always
being
in
the
market
fully
invested,
thus
having
the
potential
to
stay
in
cash
or
be
predominantly
short
in
a
bear
market.
The
challenge
for
technical
analysts
is
to
develop
an
edge
when
trading
the
markets
with
common
technical
indicators
but
using
uncommon
trading
tactics.
With
the
technical
analysis
approach
to
trading
ETFs,
how
long
do
I
stay
in
a
position?
I
believe
the
best
approach
to
trading
ETFs
is
with
swing
trading.
Swing
trading
is
a
commonly
used
term
to
describe
any
method
of
trading
whose
trade
duration
lasts
from
a
few
days
to
a
few
weeks
using
daily
charts.
Position
trading,
on
the
other
hand,
is
any
method
of
trading
whose
trade
duration
lasts
from
weeks
to
months.
The
next
category
would
be
investing,
which
is
typically
viewed
as
being
in
a
position
for
months
to
years.
Swing
trading
gets
its
name
from
putting
on
trades
that
attempt
to
capture
swing
moves
typical
of
a
bull
market
from
a
swing
low
(when
the
market
corrects
down
after
a
sustained
rally
and
then
begins
to
go
up
once
again)
to
a
new
swing
high
which
would
mark
the
end
of
the
new
rally.
Or
in
a
bear
market,
where
the
market
makes
a
swing
high
(when
the
market
rallies
up
after
a
sustained
move
down
and
then
begins
to
go
down
once
again)
to
a
new
swing
low
which
would
mark
the
end
of
the
new
leg
down.
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19. Underground
ETF
Profit
Blueprint
Here
is
an
example
of
swing
trades
that
could
have
been
made
with
good
trading
methods
with
USO
–
United
States
Oil
Fund
ETF.
This
has
been
plotted
using
Advanced
GET
charting
software
(Figure
3).
Figure
3
–
Swing
Trading
Examples
There
are
many
methods
available
that
can
be
classified
as
swing
trading
methods.
Some
are
good
and
some
are
not.
I
believe
that
swing
trading
with
the
right
methods
is
the
best
way
to
trade
ETFs
for
a
few
reasons.
1. I
believe
that
the
trader
has
the
opportunity
to
achieve
the
greatest
gain
for
the
time
invested,
meaning
that
only
end
of
day
data
is
considered
in
making
trading
decisions
and
consequently
it
is
not
necessary
to
sit
in
front
of
a
computer
all
day
long
during
market
hours.
2. With
swing
trading
you
have
the
opportunity
to
use
your
account
dollars
more
efficiently.
For
example,
if
it
were
possible
to
gain
10%
in
one
trade
lasting
for
3
weeks,
and
then
redeploying
those
same
funds
in
the
next
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20. Underground
ETF
Profit
Blueprint
trade
opportunity,
wouldn’t
that
be
better
than
tying
up
those
same
funds
for
a
1
year
trade
that
yielded
10%?
3. I
believe
you
can
use
much
tighter
stops
than
is
possible
for
methods
aimed
at
longer
trade
durations.
Which
is
a
better
trading
approach
with
ETFs:
fundamental
or
technical
analysis?
That
is
a
matter
of
opinion.
I
believe
technical
analysis
combined
with
risk
and
portfolio
management
rules
applied
to
swing
trading
strategies
is
superior
to
a
fundamental
analysis
approach
that
is
always
in
the
market.
Furthermore,
fundamental
analysis
of
ETFs
can
be
exhausting
and
after
spending
several
hours
on
one
ETF
you
may
still
not
be
able
to
come
to
any
conclusion
on
whether
or
not
it
represents
a
good
trading
opportunity.
With
good
swing
trading
methods,
on
the
other
hand,
you
have
the
potential
to
profit
in
a
matter
of
a
few
days
to
a
few
weeks
by
being
very
selective
and
waiting
for
only
the
best
of
the
best
trading
opportunities
and
then
when
they
occur
be
prepared
to
act.
This
approach
can
be
particularly
powerful
if
your
trading
methods
are
so
precise
that
you
can
then
harness
the
power
of
good
charting
software
ETF
scanning
capability.
Here’s
how
it
works.
Your
trading
methods
must
be
defined
in
such
a
way
so
that
they
can
be
easily
programmed
into
any
good
charting
software
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21. Underground
ETF
Profit
Blueprint
scanning
program.
Once
done,
all
it
takes
is
the
push
of
a
button
each
day
after
the
markets
close
and
voila,
only
those
few
ETFs
that
meet
the
trading
method
setup
conditions
appear
out
of
the
over
600
currently
traded
in
the
US.
The
same
goes
for
ETFs
traded
on
exchanges
around
the
world.
Some
days,
there
will
be
no
selections
and
that
is
OK,
because
with
this
approach
you
only
want
the
best
of
the
best
trade
opportunities.
Now
compare
that
to
slaving
over
the
task
of
doing
fundamental
analysis
on
ETF
after
ETF
with
no
clear
way
to
convert
all
of
that
analysis
into
action.
There’s
no
comparison.
And
best
of
all
with
this
approach
you
are
only
in
the
market
when
the
opportunities
occur
and
when
they
do
not
you
are
in
cash
out
of
harms
way.
Can
you
day
trade
ETFs?
Yes,
but
I
don’t
recommend
it.
Day
trading
requires
a
great
deal
of
time
staring
at
a
computer
during
market
hours
where
the
trader
tries
to
scalp
the
market
for
a
few
dollars
by
trading
in
and
out
of
positions
in
minutes
or
hours
at
the
most.
Transaction
costs
are
high
and
the
success
rate
of
day
traders
in
general
is
low.
Day
trading
in
my
opinion
is
simply
not
worth
the
effort
given
the
highly
risky
nature
of
day
trading
and
the
time
required
and
limited
potential
for
reward.
It’s
often
been
said
that
if
you
can’t
make
money
trading
after
the
market
closes,
you’ll
almost
certainly
not
make
any
money
day
trading.
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22. Underground
ETF
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What
is
the
best
risk
management
strategy?
As
is
the
case
with
all
trading,
it
is
very
important
to
have
a
simple
but
powerful
risk
management
strategy.
Not
all
trades
will
be
profitable,
that
is
the
nature
of
trading,
and
so
you
must
have
a
strategy
to
exit
each
and
every
trade
you
enter
into
before
you
enter
into
the
trade.
Furthermore,
while
there
are
several
complex
approaches
to
risk
management
(such
as
optimal-­‐f),
I
believe
simple
is
better
because
if
you
understand
your
risk
management
strategy,
you
will
be
far
more
inclined
to
follow
it
without
exception.
That
is
why
I
have
adopted
the
simple
but
powerful
strategy
of
risking
no
more
than
2%
of
the
trading
account
size
per
trade.
For
example,
if
you
had
an
account
size
of
$20,000,
you
would
not
risk
more
than
$400
on
the
next
trade.
Risk
here
means
the
amount
you
would
lose
if
the
trade
goes
against
you.
So
that
if
you
lost
3
in
a
row,
your
account
would
still
be
in
fairly
good
shape
at
around
$18,824
and
if
you
won
3
in
a
row
with
a
reward
to
risk
ratio
of
3
to
1,
your
account
would
be
in
great
shape
at
around
$23,820.
This
is
a
great
discipline
to
follow
because
when
you
have
a
losing
trade,
you
would
automatically
risk
fewer
dollars
on
the
next
trade
and
only
risk
more
dollars
following
a
profitable
trade.
This
is
the
reverse
of
what
emotionally
driven
traders
usually
do.
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Inc.
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Page
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39

23. Underground
ETF
Profit
Blueprint
How
do
I
manage
my
account
from
a
portfolio
standpoint
with
ETF
swing
trading?
Here
again,
simple
is
better.
I
believe
a
great
way
to
do
this
is
by
dividing
your
tradeable
account
by
10
into
10
separate
increments.
So
with
that
same
$20,000
account
you
would
have
10
increments
of
$2,000
apiece.
When
your
swing
trading
method
identifies
a
high
potential
trade
opportunity,
you
would
then
buy
$2,000
worth
of
that
ETF,
provided
however
that
you
would
not
be
risking
more
than
2%
of
your
tradeable
account
size
on
that
trade.
And
with
this
approach,
you
will
find
that
most
of
the
time
you
would
be
risking
less
than
2%.
And
when
a
second
trade
opportunity
develops,
you
would
then
buy
$2,000
worth
of
that
ETF
and
so
on
up
to
a
maximum
of
10
positions.
Now,
here
is
the
great
thing
about
this
strategy.
When
the
ETF
markets
are
trending,
offering
good
trading
opportunities
as
defined
by
your
trading
method,
you
will
have
most
of
your
account
if
not
all
invested
in
up
to
10
ETF
trades
at
the
same
time.
And
when
the
markets
are
choppy
and/or
not
offering
good
trading
opportunities,
you
will
have
only
a
few
positions
on
or
none
at
all
at
the
same
time.
So
with
this
approach
you
should
be
in
the
markets
when
the
opportunities
are
present
and
in
the
safety
of
cash
when
they
are
not.
Your
level
of
invested
funds
as
a
percent
of
your
tradeable
account
will
go
up
and
down
according
to
the
opportunities
available.
This
is
an
excellent
way
to
aim
at
avoiding
bear
markets
(or
even
profit
from
them),
and
at
the
same
time
avoiding
choppy
markets
as
well
those
that
are
just
too
risky
to
trade.
Copyright
©
Profits
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Inc.
www.profitsrun.com
Page
23
of
39

24. Underground
ETF
Profit
Blueprint
Are
all
ETFs
appropriate
for
trading?
This
is
a
very
important
question
and
one
that
is
not
easily
answered
by
most
traders.
But
I
have
found
a
simple
yet
very
powerful
way
to
discriminate
among
ETFs
to
screen
for
only
those
that
offer
the
best
swing
trading
opportunities.
For
a
better
idea
of
what
I’m
talking
about,
look
at
Figure
4.
This
is
a
chart
of
BMV
–
Claymore
BIR
Leaders
Mid-­‐Cap
Value
ETF,
plotted
using
Telechart
charting
software.
This
ETF
is
very
thinly
traded
and
not
suitable
for
swing
trading.
Figure
4
–
Thinly
traded
ETF
example
Figure
5,
on
the
other
hand,
EWW
–
iShares
MSC
/
Mexico
Index
Fund
ETF,
is
heavily
traded
with
an
acceptable
volatility
level
that
is
suitable
for
swing
trading.
Copyright
©
Profits
Run,
Inc.
www.profitsrun.com
Page
24
of
39

25. Underground
ETF
Profit
Blueprint
Figure
5
–
Heavily
traded
ETF
example
So
here’s
my
simple
yet
effective
criteria
for
determining
the
best
ETFs
to
swing
trade.
 First,
I
use
a
volume
filter
that
simply
requires
that
an
ETF
have
an
average
trading
volume
over
the
past
50
trading
days
that
is
greater
than
300,000
shares
per
day
(for
US
exchange
traded
ETFs
and
lower
volume
filters
for
other
country
exchange
traded
ETFs).
This
filter
will
rule
out
those
ETFs
that
are
too
thinly
traded
to
expect
good
order
execution.
 Second,
I
use
a
volatility
filter
that
is
somewhat
complex
but
easy
to
program
into
most
good
charting
software
search
capability.
Here
it
is:
o
Volatility
Filter:
(Highest
high
of
the
past
30
days
–
Lowest
low
of
the
past
10
days)
/
Close
<
0.15.
This
filter
will
rule
out
those
ETFs
that
are
too
volatile
too
trade
because
to
do
so
would
require
taking
on
too
much
risk
that
is
out
of
proportion
to
the
potential
reward.
Copyright
©
Profits
Run,
Inc.
www.profitsrun.com
Page
25
of
39

26. Underground
ETF
Profit
Blueprint
These
two
filters
will
find
the
ETFs
that
are
most
suitable
for
trading,
which
is
about
20%
of
all
ETFs
available.
These
filters
alone
will
greatly
increase
your
chances
of
success
as
they
rule
out
ETFs
that
are
simply
more
risky
to
trade
and
not
worth
the
effort.
Can
I
trade
ETFs
inside
an
IRA?
Yes,
again
because
ETFs
trade
like
stocks,
they
can
be
traded
within
an
IRA
as
well
and
even
some
401Ks.
Another
advantage
of
trading
ETFs
in
an
IRA
is
that
you
can
also
buy
“short”
ETFs
which
could
be
a
great
way
to
hedge
your
overall
portfolio
against
market
downtrends
or
outright
bear
markets.
This
is
a
very
significant
advantage
as
IRAs
are
not
allowed
to
actually
short
stocks
or
ETFs
or
anything
else
for
that
matter.
And
again
you
have
the
advantage
of
diversification
through
the
various
types
of
ETFs
offered
without
the
higher
fee
structure
and
trading
limitations
of
mutual
funds.
Also,
once
the
real
ETF
“explosion”
takes
place,
don’t
be
surprised
to
see
companies
let
you
trade
ETFs
within
your
401(k).
If
you
get
educated
today
on
how
to
harness
the
power
of
ETFs,
they
you’ll
be
poised
for
all
the
profit
potential
you
can
find
if
and
when
that
happens.
Can
you
elaborate
on
the
various
types
of
ETFs
available?
Following
is
a
partial
listing
of
ETFs
by
category
to
give
you
an
idea
of
the
variety
available:
Commodity
ETFs
 IAU
-­‐
iShares
COMEX
Gold
Trust
ETF
Copyright
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Page
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39

27. Underground
ETF
Profit
Blueprint
 SLV
-­‐
iShares
Silver
Trust
ETF
 DGL
-­‐
PowerShares
DB
Gold
Fund
ETF
 DBP
-­‐
PowerShares
DB
Precious
Metals
Fund
ETF
 GCC
-­‐
GreenHaven
Continuous
Commodity
Index
 GSG
-­‐
iShares
GSCI
Commodity-­‐Indexed
Trust
ETF
 DBC
-­‐
PowerShares
DB
Commodity
Index
Tracking
Fund
ETF
 DBA
-­‐
PowerShares
DB
Agriculture
Fund
ETF
 USO
-­‐
United
States
Oil
Fund,
LP
ETF
 UNG
-­‐
United
States
Natural
Gas
Fund,
LP
ETF
 MOO
-­‐
Van
Eck
Market
Vectors
Agribusiness
ETF
Currency
ETFs
 DBV
–
PowerShares
DB
G
10
Currency
Harvest
Fund
 UDN
–
PowerShares
DB
US
Dollar
Index
Bearish
Fund
 UUP
–
PowerShares
DB
US
Dollar
Index
Bullish
Fund
 FXE
–
Currency
Shares
Euro
Trust
ETF
US
Stock
Index
ETFs
 SPY
–
SPDRs
S&P
500
Trust
Series
ETF
 DIA
-­‐
Diamonds
Trust
Series
ETF
 QQQQ
–
PowerShares
QQQ
Trust
Series
ETF
Small
Cap
ETFs
 GWX
–
SPDR
S&P
International
Small
Cap
ETF
 JSC
–
SPDR
Russell/Normura
Small
Cap
Japan
ETF
 DSV
–
SPDR
D
J
Wilshire
Small
Cap
Value
ETF
 DSG
–
SPDR
D
J
Wilshire
Small
Cap
Growth
ETF
Sector
ETFs
 VHT
–
Vanguard
Health
Care
ETF
 IYE
–
iShares
Dow
Jones
US
Energy
Sector
Index
Fund
ETF
 IYR
–
iShares
Dow
Jones
US
Real
Estate
Index
Fund
ETF
 PBE
–
PowerShares
Dynamic
Biotech
Portfolio
ETF
 PJB
–
PowerShares
Dynamic
Banking
Portfolio
ETF
 XES
–
SPDR
S&P
Oil
&
Gas
Equipment
&
Services
ETF
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Page
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28. Underground
ETF
Profit
Blueprint
Bond
ETFs
 TIP
–
iShares
Lehman
TIPS
Bond
Fund
ETF
 AGG
–
iShares
Lehman
Aggregate
Bond
Fund
ETF
 BSV
–
Vanguard
Short
Term
Bond
ETF
 MBB
–
iShares
Lehman
MBS
Fixed-­‐Rate
Bond
ETF
International
ETFs
 EWW
–
iShares
MSCI
Mexico
Index
Fund
ETF
 EWY
–
iShares
MSCI
South
Korea
Index
Fund
ETF
 FXI
–
iShares
FTSE/Xinua
China
25
Index
Fund
ETF
 ADRU
–
BLDRS
Europe
100
ADR
Index
Fund
ETF
 GMF
–
SPDR
S&P
Emerging
Asia
Pacific
ETF
 GML
–
SPDR
S&P
Emerging
Latin
America
ETF
Leveraged
and
Short
ETFs
 SKF
–
ProShares
UltraShort
Financials
ETF
 RWM
–
ProShares
Short
Russell
2000
ETF
 RXD
–
ProShares
UltraShort
Healthcare
ETF
 MYY
–
ProShares
Short
MidCap400
ETF
Can
I
apply
stock
swing
trading
methods
to
swing
trading
ETFs?
Yes
and
no.
While
ETFs
trade
like
stocks
during
normal
exchange
hours,
the
price
behavior
of
ETFs
is
different
as
the
price
is
determined
by
a
group
of
stocks,
bonds,
etc.
trading
in
unison
and
so
the
volatility
levels
and
price
patterns
and
just
the
general
day
to
day
ebb
and
flow
of
these
ETF
markets
can
be
different
in
their
price
behavior
than
the
individual
equities
that
make
them
up.
For
example,
Figure
6
is
a
price
chart
of
SKF
–
ProShares
UltraShort
Financials
ETF
where
the
price
goes
up
when
the
financial
stocks
go
down
in
price.
Copyright
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Profits
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Inc.
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Page
28
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39

29. Underground
ETF
Profit
Blueprint
Figure
6
–
SKF
-­‐
ProShares
UltraShort
Financials
ETF
Figure
7
is
a
price
chart
of
C
–
Citigroup.
Notice
how
the
price
of
C
has
been
trending
down
for
months
in
a
fairly
deliberate
manner
whereas
the
‘short’
fund
SKF
has
been
trending
up
as
you
would
expect,
but
in
a
more
erratic
manner.
Clearly,
the
price
behaviors
of
SKF
and
C
are
different.
Copyright
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Inc.
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Page
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39

30. Underground
ETF
Profit
Blueprint
Figure
7
–
C
-­‐
Citigroup
Also,
with
ETFs,
you
have
the
added
challenge
of
finding
which
sector
or
country
or
currency
or
commodity
related
ETFs
are
offering
the
best
trading
opportunities
at
any
point
in
time.
And
for
those
reasons
it
is
far
better
to
apply
trading
methods
that
are
specifically
designed
for
ETFs.
And
I
don’t
want
to
have
to
analyze
or
review
the
over
600
ETFs
currently
available
to
decide
which
ones
offer
the
best
opportunities,
so
I
prefer
to
follow
ETF
trading
methods
that
are
powerful
but
easily
programmable
into
good
charting
software
scanning
programs
that
can
then
tell
me
at
the
push
of
a
button,
with
very
selective
precision,
those
ETFs
offering
the
best
opportunity.
Also,
I
believe
it
is
better
to
be
more
conservative
when
trading
ETFs
than
with
individual
stocks.
After
all,
trading
ETFs
should
be
a
more
conservative
kind
of
trading
as
you
are
already
enjoying
a
level
of
diversification
by
trading
a
basket
of
stocks
as
opposed
to
an
individual
stock.
With
stocks,
there
are
almost
always
trading
opportunities
every
day
in
the
markets.
And
often
times
that
is
the
case
with
ETFs
as
well,
but
with
ETFs,
I
Copyright
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39

31. Underground
ETF
Profit
Blueprint
prefer
to
be
even
more
selective
than
I
am
with
stocks
and
wait
for
only
the
best
of
the
best
opportunities.
Can
I
trade
options
with
ETFs?
Yes,
since
ETFs
trade
like
stocks,
there
are
also
tradeable
options
on
many
ETFs.
In
my
opinion,
an
option
trader
needs
at
least
two
things
to
trade
options
successfully.
One
is
getting
an
appropriate
education
on
options
and
the
other
is
applying
that
knowledge
to
a
good
trading
method.
By
so
doing
you
have
the
“option”
of
trading
options
in
lieu
of
the
underlying
security
when
your
trading
method
signals
a
buying
opportunity.
For
example,
if
an
ETF
is
selling
at
$40
a
share,
there
may
be
an
option
available
on
that
ETF
that
you
could
buy
at,
say,
$8
a
share.
So
if
your
trading
method
signaled
a
buy
at
$40
and
you
wanted
to
buy
100
shares
at
$40
that
would
be
an
investment
of
$4,000.
But
instead,
you
could
elect
to
buy
1
call
option
(the
right
but
not
the
obligation
to
buy
the
underlying
ETF
at
a
strike
price)
which
controls
100
shares
of
the
ETF
for
$8
or
a
total
investment
of
$800,
thereby
controlling
100
shares
of
the
ETF
with
a
much
smaller
investment.
But
a
strong
word
of
caution
here:
Just
because
less
money
is
required
to
enter
into
the
option
position
does
not
mean
that
you
should
risk
more
on
this
trade
than
you
would
have
had
you
bought
the
underlying
ETF
instead.
You
must
follow
good
risk
management
principles
in
either
case.
Copyright
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32. Underground
ETF
Profit
Blueprint
Can
you
elaborate
on
trading
ETF
options
and
what
is
the
best
ETF
options
strategy?
This
depends
on
the
strategy
of
your
trading
method.
For
swing
trading,
I
believe
the
best
strategy
is
to
use
in-­‐the-­‐money
call
options.
Following
is
an
overview
of
option
trading
and
trading
with
in-­‐the-­‐money
call
options.
Options
present
the
opportunity
for
greatly
increased
leverage,
but
also
increased
risk
if
you
do
not
use
them
properly.
On
the
other
hand,
if
used
properly,
options
(vs.
positions
in
the
underlying
security
such
as
an
ETF)
can
actually
reduce
the
risk
in
a
trade
while
at
the
same
time
maintain
the
leverage
on
the
upside.
There
are
many
things
to
know
about
options.
There
are
the
basic
mechanics
on
how
options
work
and
then
there
are
the
various
risk
factors
inherent
in
options.
Those
risk
factors
are
measured
by
what
is
referred
to
as
“the
greeks.”
The
greeks
include
delta,
gamma,
theta,
and
vega;
each
measuring
a
different
aspect
of
risk.
You
need
to
understand
each
of
these
risk
factors
before
trading
options
as
well
as
the
risk
curve
for
each
option
strategy
that
you
use.
Having
said
that,
here
are
a
few
basics
and
one
strategy
(of
the
many
available)
that
I
believe
is
a
simple,
but
effective
use
of
options.
That
is
simply
buying
in-­‐the-­‐money
call
options.
A
call
option
is
the
right
to
buy
the
underlying
security
at
a
specified
price
(called
the
strike
price)
by
a
specified
time
(the
expiration
date).
If
the
underlying
security
is
trading
below
the
strike
price,
the
call
option
is
said
to
be
out-­‐of-­‐the
money.
If
the
underlying
security
is
trading
above
the
strike
price,
the
call
option
is
said
to
be
in-­‐the-­‐money.
And
if
the
underlying
security
is
trading
at
the
strike
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33. Underground
ETF
Profit
Blueprint
price,
the
call
or
put
option
is
said
to
be
at-­‐the-­‐money.
A
put
option
on
the
other
hand,
is
the
right
to
sell
the
underlying
security
at
a
specified
price
by
a
specified
time.
The
price
of
an
option
has
two
components,
intrinsic
value
and
extrinsic
or
time
value.
One
of
the
key
attributes
of
an
option
to
understand
is
volatility
and
its
impact
on
the
option
price.
The
higher
the
implied
volatility,
the
higher
the
extrinsic
value
will
be
and
the
higher
will
be
the
option
price.
For
example,
if
the
ETF
for
a
May
40
call
option
was
trading
at
$45
in
January,
the
option
could
be
priced
at
$8,
that
would
be
$5
of
intrinsic
value
($45
ETF
price
-­‐
$40
option
strike
price)
and
$3
of
extrinsic
or
time
value.
As
expiration
date
approaches,
the
time
value
will
“decay”
down
to
zero
at
expiration.
So
when
you
own
options
with
extrinsic
value,
you
are
fighting
time.
Here’s
a
graph
of
the
risk
curve
for
the
Nov
75
call
option
for
a
stock
(but
the
same
principle
applies
to
ETF
options)
to
further
illustrate
this
point,
compliments
of
Value
Line.
The
vertical
axis
is
the
profit
&
loss
of
the
option
position
(if
the
option
was
bought
for
$10.40
on
9/10/01)
versus
the
horizontal
axis
which
is
the
stock
price.
There
are
three
curves
plotted.
The
blue
curve
shows
the
impact
on
profit
&
loss
at
different
stock
prices
as
of
9/10/01.
The
pink
curve
shows
the
same
thing
but
as
of
10/14/01
and
is
lower
than
the
blue
curve
due
to
time
decay.
And
finally
the
brown
curve
also
shows
the
same
thing
but
at
option
expiration
on
11/17/01
and
is
lower
still
as
time
decay
has
now
driven
the
extrinsic
value
down
to
zero.
Copyright
©
Profits
Run,
Inc.
www.profitsrun.com
Page
33
of
39