Trina Solar (TSL) June 22.5 Calls Exercised

The Trina Solar (TSL) June 22.5 covered calls we wrote on 5/27/2009 were called away following options expiry as the shares closed above 22.5. Also, as we twittered previously, we liquidated our position in Direxion 3X Bull (FAS) and the covered calls we wrote against it were bought back. The net effect of these transactions is a slight overall gain. The returns from all our transactions this year total around one percentage point.

Trina Solar (TSL) rallied more than 200% from its March lows following a surprise Q1 profit. We decided to liquidate the position as we felt the forward PE of around 20 is high for a low-margin business. With Direxion 3X Bull (FAS), we felt that the easy money in financials has already been made and holding a leveraged position in the sector won’t be beneficial as we expect volatile range-bound trading in the near-term. We are selling into this rally in anticipation of a near-term correction. Below is our updated portfolio - it is about 22% in the red. Our cash position is about 28%:

Stock	Buy Date	Buy Price	Current Price	Current % Of Portfolio	Unrealized % Return	Yield as % of Portfolio Value
Altria (MO)	Various	16.69	16.41	3.53	(1.65)	0.38
Philip Morris International (PM)	1/4/2005	32.19	42.15	8.38	30.93	0.45
Kraft Foods (KFT)	Various	24.03	25.41	3.64	5.72	0.23
Pfizer (PFE)	Various	24.37	15	6.31	(38.44)	0.30
ICICI Bank (IBN)	5/18/2006 and 08/01/2008	25.28	29.83	10.68	18.02	0.30
Advantage Energy Fund (AAV)	11/2/2006	11.22	4.89	1.75	(56.43)	0.17
Central Europe & Russia Fund (CEE)	Various	39.23	22.68	5.69	(42.18)	0.03
Patni Computers (PTI)	8/10/2007	20.85	10.42	3.73	(50.06)	0.08
Itron Inc. (ITRI)	11/07/2007	85.01	56.59	4.05	(33.51)	None
Anthracite (AHR)	11/09/2007	7.97	0.77	0.28	(90.34)	0.00
ClickSoftware (CKSW)	11/09/2007	4.61	5.48	3.93	18.87	None
Harvest Energy (HTE)	11/28/2007	21.01	5.91	1.69	(71.88)	0.22
iRobot (IRBT)	12/18/2007	18.65	13.06	3.74	(29.37)	None
LDK Solar (LDK)	01/22/2008	30.49	11.01	2.37	(63.89)	None
Aegon N.V. (AEG)	04/28/2008	15.99	6.25	1.34	(60.90)	0.00
TD Ameritrade (AMTD)	05/21/2008	17.68	17.36	4.97	(1.84)	None
Costco (COST)	08/01/2008	62.28	46.11	3.30	(25.96)	0.07
Frontline Limited (FRO)	10/06/2008	36.95	26.60	2.86	(28.00)	0.17
DryShips Incorporated (DRYS)	02/09/2009	6.96	6.19	3.10	(11.12)	0.00
Cash				27.93
Total Portfolio					(22.62)	2.54

• For Altria and Philip Morris International, assumed spin-off ratio of 30.83:69.17. Altria is yet to supply the cost-basis info

Below is a summary of transactions during the year:

Stock	Buy Date	Buy Price	Sell Date	Sell Price	% Gain (Loss)	% Portfolio Return*
DryShips (DRYS)	Various	11.66	01/29/2009	8.96	(23.29)	(1.39)
DryShips Feb 15 Calls (OOCBC)	01/29/2009	0.20	01/16/2009	2.50	922	0.58
Companhia Siderugica Nacional (SID)	Various	11.03	01/29/2009	16.01	44.86	1.73
Taiwan Semi Feb 7.5 Calls (TSMBU)	Expired	NA	01/09/2009	0.90	NA	0.77
Taiwan Semi (TSM)	7/27/2006	8.70	03/03/2009	7.76	NA	(0.78)
Direxion Financial Bull 3X Shares (FAS)	03/16/2009	5.09	03/19/2009	6.53	28.31	1.26
Direxion Financial Bull 3X Shares (FAS)	03/23/2009	5.94	03/23/2009	6.22	4.63	0.19
Direxion Financial Bull 3X Shares (FAS)	03/24/2009	6.45	03/24/2009	7.12	10.30	0.44
Direxion Financial Bear 3X Shares (FAZ)	03/26/2009	19.67	03/27/2009	19.91	1.22	0.05
Direxion Financial Bull 3X Shares (FAS)	03/30/2009	5.49	03/31/2009	5.20	(5.35)	(0.23)
Direxion Financial Bear 3X Shares (FAZ)	04/09/2009	10.47	04/13/2009	11.03	5.40	0.22
RQCDU – Ericsson April 7.5 Calls	1/21/2009	NA	04/18/2009	7.50	NA	0.65
Ericsson ADR (ERIC)	5/5/2008	11.83	04/18/2009	7.48	(36.80)	(3.04)
FASEB – May 10 calls on FAS	4/27/2009	0.58	04/22/2009	0.90	NA	0.14
FASEJ – May 8 calls on FAS	5/01/2009	0.93	04/30/2009	1.47	NA	0.14
Direxion Financial Bull 3X (FAS)	4/13/2009	9.86	06/18/2009	8.78	(10.95)	(0.47)
FASFI – June 9 calls on FAS	6/18/2009	0.28	05/18/2009	1.52	NA	0.54
Trina Solar (TSL)	Various	24.90	6/20/2009	22.50	(9.65)	(1.05)
TSLFX – June 22.5 calls on TSL	6/20/2009	0	05/27/2009	2.77	NA	1.21
Realized Gain/(Loss) YTD	-	-	-	-	-	1.36

• % Gain/Loss Relative to Portfolio Value at Beginning of Year + Deposits
• The table assumes realization of profits associated with selling options only after the option is exercised or expiry.