Dear Reader,

I would like to share with you an investment strategy that is used by the world’s wealthiest investors to make extraordinary profits in any market.

I will also show you a very simple plan that you can use to put this strategy to work in your own portfolio.

This well-proven system has already handed out gains like 304% in less than a month... 130% in 16 days... 107% in 17 days... 67% in 48 hours...

Imagine turning $5,000 into an $11,500 payday... in less than two weeks!

Now, imagine doing that 5 or 10 times a year... while at the same time you are putting a steady stream of double-digit profits in your pocket... gains like 39% in 6 days… 31% in 3 hours... and 37% in a single afternoon.

You’re about to learn how you can book gains just like these… month in and month out… whether the markets are rising or falling.

And the best part is that you can generate these aggressive returns in a way that REDUCES your risk in the markets.

This is a way of investing that can help you to…

• Generate windfall profits month after month, even if there is a nasty downturn in the markets

• Bank a high percentage of high double and triple digit winners

• Diversify your investments across a broad spectrum of sectors and markets

• Earn even bigger returns when other investors are losing their shirts

• Reduce the overall risk to your portfolio

• Capture larger gains with a lot less money on the table

You’re about to learn how to supercharge your returns… without jacking up your risk!

But before I begin, I want to make a few things very clear.

To participate in this strategy...

• You do NOT have to be a financial wizard.

• You do NOT have to have a large amount of money, and

• You do NOT have to have any trading experience.

You should also know that this won’t require much of your time either… about 20 minutes a week is all you need.

In this letter, you will learn how to use what the Financial Times calls “the Swiss Army Knife of the investment world” to turn your portfolio into a world-class custom hedge fund.

You won’t believe how simple... and how profitable... it can be!

Hedge funds might have a reputation for being "risky”, but the very nature of a "hedge" fund is to reduce risk. What’s more, these funds are designed to produce a profit whether the markets are trading up... down... or even sideways.

The way many funds accomplish this is to hold the bulk of their capital in stable, appreciating assets, cash and other conservative securities.

Then, they use a smaller portion of capital to generate explosive short-term profits on both the long and short side of the market.

These funds also enjoy extraordinary flexibility, investing across asset classes and in virtually any market where there is an opportunity for profit.

Does it work?

You bet it does...

Consider the Prosperity Quest Fund. When the broader markets were getting crushed in 2001 and 2002, Prosperity Quest gained more than 1,500%!

Or consider the Trophy Fund, which rose more than 430% over the last three years, compared to 32% for the S&P.

Or the Turnberry Capital Partners Fund which has returned well over 5,000%.

How much different would your portfolio look today if you were in for a piece of that action over the last five years?

It’s no wonder that the amount invested in these funds has exploded to over $1.5 trillion.

But the unfortunate thing is that most investors will never even qualify for these kinds of investments. Before you can even think about investing in a hedge fund, you need a liquid net worth of at least half a million dollars, and a minimum investment that could well exceed a million dollars.

But don’t worry...

None of these restrictions will apply to you. I will show you how to use a unique class of investments to easily construct your own hedge fund... helping you to beat the market by the widest possible margin.

And I don’t mean a few percent here and there... I’m talking about booking a steady stream of high double and triple-digit gains, month after month!

I’m going to show you how you can make big money when the markets rally... and when they pull back.

The only difference is that you won’t have to share 20% of your profits with a fund manager!

This amazing opportunity only exists because of a special class of investments called Exchange Traded Funds...

As you probably know, an Exchange Traded Fund (ETF) is a basket of securities designed to track an index or a particular market sector. They are similar to mutual funds, because they diversify across a group of securities

But ETFs certainly don’t trade like mutual funds. With a mutual fund, you can only buy and sell after the market has closed. This can pose quite a disadvantage in a fast-moving or unstable market.

ETFs, on the other hand, trade just like stocks. That means you can buy and sell shares at any time during the day. There are no minimum investments... no minimum holding periods... and no penalties for selling.

With ETFs you get all the money-making power of stocks combined with the diversification of mutual funds!

According to Morningstar, there are well over 300 ETFs to choose from. And in just the last four years, assets in ETFs have quadrupled.

It is expected that by 2010 there will be $1 trillion invested in ETFs.

Considering their many advantages, it’s no wonder some are calling Exchange Traded Funds “the hottest investment vehicle of the 21st century!"

ETFs allow you to easily invest in virtually any market or sector you can think of.

• With the “Spyders", “Diamonds" and “Cubes” you can easily track the Big Three U.S. indices.

• There are ETFs that focus on large cap companies... small caps... high-yield investments... value companies... growth companies... foreign stocks... bonds.

• You can use ETFs to invest in highly specific market sectors like medical devices... semiconductors... REITs... commodities... nanotechnology... or the financial sector.

Name just about any investment sector or a world market you can think of, and there’s a good chance an ETF has been designed to track it. That’s why Financial Times calls them “the Swiss army knife of the investment world.”

You will soon learn exactly how you can use ETFs to make profits of 100% or more, in a short period of time with just a small amount of capital.

But first, I want to show you the safety and diversification you get through ETFs...

Let’s say that you were bullish on the pharmaceutical industry back in July and you wanted to buy a stock in that sector. First, you would have to do a considerable amount of research in order to choose what you think is the most promising stock among the hundreds of pharmaceutical companies.

In this case, we’ll assume you invested in Bristol Myers Squibb (BMY). This is a strong and well-established company. If Big Pharma was about to take off, BMY should be a good way to play it.

But check out the chart below. Bristol Myers dropped more than 20% in less than three weeks!

But guess what?

Your bullish bet on the pharmaceutical sector was right on.

Instead of purchasing just one stock, if you had purchased the Pharmaceutical HOLDRs Trust (PPH) – an ETF that holds 21 different pharmaceutical companies – you would have been making money instead of losing it!

Take a look...

No matter how extensive your due diligence, if you buy just one stock, your position could get slammed by something that comes out of the blue. It could be a poor earnings report, an analyst downgrade, or a scandal like options backdating.

But by buying an ETF, you can spread your investment across an entire sector and substantially reduce your company specific risk.

If you had purchased the pharmaceutical ETF in July and sold just a month or two later, you would have made a quick 10% or 15% profit.

That’s a great return.

But I want to show you how you could have made 10X that much!

To capture big returns in a short period of time you need options.

And the great thing about ETFs is that you can trade options on them. And for the same reason that ETFs are safer than stocks... options on ETFs are safer than options on single stocks!

The diversification of exchange traded funds makes them the perfect vehicle for trading the markets. You get the best of both worlds – the safety of ETFs with the amazing profit potential of options.

There are very few pursuits as exciting as trading options.

There is just nothing like the thrill of buying a position on a Monday and then watching your money double before the week is over... or sitting down at your desk after a lunch break only to discover that your investment increased by 31%!

That’s exactly what happened for me just a few weeks ago, putting over $900 in my account in the time it took me to walk two blocks from my favorite lunch spot to my office.

Sometimes it is hard to believe how fast the gains come. It’s rare that I have to wait more than a few weeks for a play to hit. In fact, here is a list of some of the winners I have racked up in just the last couple of months...

• 130%... with calls on the iShares Russell 2000… in 16 days
• 107%... with calls on the NASDAQ 100 Trust... in 17 days
• 81%... with calls on the Oil Service HOLDRs Trust... in 6 days
• 82%... with puts on the Semiconductor HOLDRs Trust... in 16 days
• 47%... with calls on AMEX DIAMONDS Trust… in less than 2 months
• 44%... with calls on the Semiconductor HOLDRs Trust… in 7 days
• 39%... with calls on the iShares Lehman 20+ year Treasury Bond… in 6 days
• 37%... with puts on the iShares Lehman 7-10 Year Treasury… in 16 days

And to think that you can do this while still lowering the risk profile of your portfolio.

Before I tell you more about the strategy itself, I want to dispel a very common myth about options...

The biggest myth about trading options is that they are very high risk investments. This is simply not true.

If you trade options properly – and you do it with expert guidance – it involves less risk and can be more profitable than virtually any other investment strategy!

Consider the many ways that options can reduce your risk and increase your gains:

• Invest a fraction of the amount... for even greater returns.

With options, you can control tens of thousands of dollars worth of stock for just pennies on the dollar, allowing you to earn huge gains without putting huge amounts of money at risk.

If you don’t expose a lot of money, you can’t lose a lot of money. This also allows you to keep the bulk of your portfolio in conservative, long-term investments, while a small amount of capital does the heavy lifting.

• Options go up in value much faster than stocks.

Even the smallest price moves in an ETF can mean substantial profits. With the right options, a 2% to 5% move in the ETF can give you profits of 20% to 100%, or more. And it often happens in a matter of days!

• With options your risk is strictly limited.

Don’t mistake options with futures. With options you get all the benefits of leverage, but you can never lose more than what you invest. That means your profits are unlimited, but your downside is strictly limited.

• Make money whether the markets are rising or falling.

With options, it doesn’t matter whether the markets are rising or falling. In fact, options are even MORE profitable in a bear market. For most investors, fear is a much stronger motivator than greed. That’s why you have probably heard, “stocks take the stairs on the way up, but they take the elevator for the trip down.”

Just consider this recent example the eye-popping profit potential and pennies-on-the-dollar risk you get with options on ETFs...

At the beginning of October, I recommended call options on the iShares Russell 2000 Index (IWM), an ETF that tracks small cap stocks.

The IWM was hitting the lower rail of a short-term trend channel and it was close to its 50-day moving average. With the broader markets trending upward, I expected a strong bounce.

When I made the recommendation, the ETF was trading at $71.91 and the October 71 strike call was priced at $2.30.

The bounce happened right on cue, and just two weeks later shares of the IWM were trading at $76.25, an increase of 6%.

But on the same day, the October calls I recommended were up 130%.

If you had purchased just three contracts, it would have cost you only $690 and for that amount, you would have controlled 300 shares of stock. On the other hand, if you had invested directly in the shares, you would have risked almost $21,600!

So, let’s compare what you would have made in each scenario...

If you sold the 300 shares for a 6% profit, you would have made about $1,295. That’s great for a two week investment, but it sure is a lot of money to allocate for such a small profit.

But consider if you had purchased the options instead. If you sold the options on the same day, you would have made $897.

Think about that for a moment. If you had invested in the shares, you would have put 3,000% more money at risk... for a return of only a few hundred dollars more.

If you had purchased just six options, it would have cost you only $1,380. And yet you would have made $500 more than if you invested the $21,600 in the shares!

By purchasing options you could have left $20,000 in the safety of cash, or diversified into other investments, and still made a much greater return on investment.

As you can see, you won’t have to put a lot of money at risk to see incredible results...

Last fall, I was carefully watching the Internet HOLDRs Trust (HHH). The ETF was trading in a clear upward trending channel.

I was confident that a convergence of support points would provide a nice bounce for the shares, so I recommended call options at $1.15 per contract.

The result... the ETF literally soared overnight.

One day later the options were trading for $2.42. I recommended taking profits on one quarter of the position for a gain of 110%.

And the shares kept rising. A week later, the remaining options were trading for $3.30... a gain of 187%. So I recommended taking another quarter off the table.

Less than three weeks after the play was initiated I recommended closing out the second half of the position at $6.44... for a 460% gain!

In all, the play produced an average gain of 304%... enough to turn every $5,000 at risk into $20,200... in less than three weeks!

Here is what it looked like... the blue arrow is where we entered the play, and the red arrows represent where we sold.

In a moment, I will tell you exactly how my system works and how you can use it to substantially increase your returns and dramatically reduce your risk.

But first, please allow me to introduce myself...

My name is Rick Pendergraft.

I am a professional options trader and market advisor. For the last decade, my market insights have been featured by Reuters, BusinessWeek, Forbes, USA Today, the New York Times, and numerous other publications.

Even considering the recognition I have received from the media and the financial elite, what I am most proud of is that I have helped thousands of investors, just like you, to trade options with a high level of success.

I have been a student of the markets since a very young age. In fact, I was only 17 when I learned my first important lesson about diversification.

I entered an Indiana state-wide investment contest with a $2,500 scholarship as the grand prize. That was a lot of money to me, and I was highly motivated to win. I can still remember my friends playing basketball in the afternoons, while I was researching the markets for endless hours.

After a tremendous amount of research, I had put together what I believed would be the perfect portfolio. And sure enough, my diligent analysis and hard work paid off. With just two weeks to go, my portfolio was in 2nd place and climbing!

I had taken a large position in Union Carbide, and with the stock flying high, so was my portfolio. That is... until the company announced a tragic gas leak at a plant in Bhopal, India.

In one day, the decline in that one position took my portfolio totally out of the running... and I learned a lesson I will never forget about the importance of diversification.

Several years later, I learned another very powerful lesson, this time about the incredible leverage of options.

In my early 20s, I began trading options because I didn’t have a lot of money and I wanted to give my portfolio a boost.

I quickly discovered why options are one of the world’s most powerful moneymakers!

It was November of 1990 and I had done a lot of research on a company called NCR. The fundamental picture for the company was strong and the stock was in a well established uptrend.

The stock had pulled back, but several indicators were showing that it would continue to rise. When the stock bounced and confirmed the uptrend, I purchased around $1,800 worth of call options.

That was on a Tuesday.

It was a large position for the size of my portfolio, but I was planning to exit early if the trade went against me. Fortunately, shares of NCR crept up all week, and by Friday I was sitting on a 20% gain.

Not bad, but I had no idea what I was in store for next.

On Sunday, it was announced that AT&T would be acquiring NCR. As you can imagine, I hardly got a wink of sleep that night. I laid awake for hours, just imagining how much those options would be worth and what I would do with the money.

Before noon on Monday, I sold my position for more than $22,000!

Now, I’m not suggesting it was just my brilliant research that put me in the trade with perfect timing. I know full well that I got very lucky.

The point that I am making is that in just ONE WEEK my entire financial picture changed. It was an explosive wake up call to the profit potential of options.

I learned first hand that options can be HUGELY profitable.

But I also very quickly learned that if you “play” at options you will lose. Successful trading requires diligent research and intelligent risk management.

You must also learn from an expert who can share the secrets about which options to buy, and when to buy and sell them.

I knew that there were traders out there who were routinely putting up double... triple... and quadruple-digit gains. So I began to rigorously study the methods of those who had used options to build a substantial fortune and I began to model the strategies of these trading masters.

Some years later, I read a book called The Option Advisor: Wealth-Building Techniques Using Equity and Index Options, written by Bernie Schaeffer. I couldn’t believe my fortune when I learned that his company was located just 20 miles from where I was living.

Bernie Schaeffer’s accomplishments are too numerous to list. But suffice to say he is the editor of one of the nation’s leading options newsletters and was awarded the “Traders Hall of Fame Award.” Over the long run, he has one of the highest success rates in the entire options advisory field.

If you want to achieve success trading options, you can’t do much better than to learn from Bernie Schaeffer. I went and applied for a job. After quite a bit of persistence, I was soon sitting at the trading desk, with one of the world’s top options traders as a mentor.

Bernie shared with me more than 30 years of trading secrets and he taught me how to carefully identify the most attractive short-term opportunities in the market.

I am very proud to say that I excelled in my role. In fact, on two occasions, I was awarded with the distinction of being the company’s “Top Trader”.

For the better part of the last decade, I have lived and breathed options trading. Sitting in front of a bank of computer monitors for hours on end, interpreting charts and digesting data has been a labor of love.

I have made hundreds of winning options trades over the years, and I have conducted forensic analysis on thousands of winning and losing trades. My experience has given me a keen understanding of what works, and what doesn’t.

And in the process, I have discovered one of the fastest ways to build wealth, with the greatest possible odds.

That is what I would like to share with you today...

It is a way to increase the returns on your portfolio... reduce your risk in the markets... and position your investments to grow whether the markets are rising or falling.

Whatever your goals are... whether you would like to trade full time... retire early... build an extra stream of income... or just increase your returns, I can help you do it!

This is not just my career. It is my calling.

I was very successful at Schaeffer’s but I was also becoming restless. My trading was restricted by arbitrary limitations. And no matter how profitable my recommendations were, there could only be one superstar at that company, and his name was on the building.

Then I received a call from MaryEllen Tribby.

MaryEllen is highly accomplished and very well-known in the world of financial publishing. She began her career just a few blocks from Wall Street, and among her many accomplishments, she has managed a large division of Forbes and served as President of Weiss Research.

What impressed me the most about MaryEllen is how dedicated she is to the individual investor. She told me it all started because of the greed and corruption she witnessed first hand on Wall Street, including hearing brokers and bankers refer to retail investors as “bagholders”. We both have a true passion for helping the individual investor get ahead in the markets.

Currently, MaryEllen is the publisher and CEO of Early To Rise, a publishing firm with hundreds of thousands of readers around the world. Early To Rise is a subsidiary of Agora Inc., the world’s leading financial newsletter publishing firm.

She told me that she was aware of my achievements and she wanted to publish a unique advisory service based on my research and recommendations.

She asked me to assume that I had “blank check” privileges to create the safest and most consistently profitable options service in the market today, and she wanted to know what I thought that service should be.

I didn’t even have to think about it...

I told her immediately, that the safest and most consistently profitable way I know to trade options is by trading options on ETFs.

I also told her that I have been trading options on Exchange Traded Funds for years. The approach I have perfected has been battle tested and it performs with amazing accuracy.

With MaryEllen’s agreement, a partnership was born.

Less than two weeks later, we packed the moving vans and my wife and three kids and I moved to Delray Beach, Florida, home of the Early To Rise headquarters.

With our combined experience and the backing of Agora Publishing, we were quickly underway. Within weeks the ETF Options Trader was launched and issuing profitable recommendations.

The ETF Options Trader is the culmination of everything I have learned about the markets over the past 20 years and it is exactly what you need to take the guesswork out of producing explosive profits no matter which way the market is trading.

Just imagine reaching out to take what you need from the market... week in and week out... instead of just waiting there and settling for what the markets give you.

I can help you do that.

In a moment, I will share with you the complete track record of the ETF Options Trader, so you can judge for yourself just how profitable this can be. But first, let me show you how we generate these explosive gains...

The overall strategy of this system is very simple and highly effective.

First, we will always be on the lookout for opportunities on both sides of the market. So it won’t matter whether the market is going up or down, you can still make substantial profits.

Often, we will be making gains on calls AND puts at the same time. For example, on October 24th, I recommended call options on the Internet HOLDRs Trust and put options on the ETF that tracks the Russell 2000 index.

Within two days we took gains of 67% on the calls, and a week later we booked gains of 41% on the puts.

And not only will you have the opportunity to earn high double and triple-digit profits... but with the ETF Options Trader you will possess a superior hedge for all your other investments, no matter what the market throws at you.

In other words, you will be engaging the markets in the same way as many of the world’s wealthiest and most successful investors.

Here is the conservative strategy we will use to help you generate aggressive returns:

1. The ETF Options Trader will generally recommend options with 30 to 60 days to expiration. With at least a month or two (sometimes more) before the options expire, there will be plenty of time for the ETF to make the move we expect. But because we are not going TOO far out, a small move in the ETF can correlate to a BIG move in the options!

2. The ETF Options Trader will generally recommend options that are in the money or at the money. By choosing options that are in the money or very near the money, you will have a LOT better odds of success and the payoff can still be substantial. Remember, trading options has nothing to do with gambling. Everything we do is designed to tip the risk / reward relationship decidedly in your favor.

The ultimate objective of the ETF Options Trader is to help you make MONEY... not trades. So don’t expect to spend hours each week monitoring and tracking positions and jumping in and out of five different trades every week.

Investors have been programmed by Wall Street to be trading all the time. But that’s not how you make money... trading just for the sake of being active in the markets.

I will normally reject 99% of the options I look at. I am only looking for the opportunities with the most favorable odds of success.

Opportunities in the market are endless, but your personal finances are not. That’s why you should never chase a price or enter into a trade that you do not have a high probability of winning.

The best summary of my trading philosophy comes from a passage in The Art of War, by Sun Tzu. The passage says...

Do not move unless it is advantageous.
Do not execute unless it is effective.
Do not challenge unless it is critical.

As a member of the ETF Options Trader, you can be confident that I will recommend pulling the trigger only when it is most advantageous and effective to put your money to work.

I also don’t make any claim to track every ETF in the market. There is just no reason for it. My goal is to provide you with highly accurate trading recommendations. And the best way I know to accomplish that is to know as much as possible about the ETFs I follow.

That’s why I only follow about 20 ETFs...

But I watch them like a hawk. I know how they trade. I know the factors that influence their prices. I know the companies and securities that make up each one. And I know their charts like the back of my hand.

I am constantly poring over the data... always on the lookout for the next 100% winner.

And speaking of diversity... you can be sure that the ETFs we recommend will give your portfolio broad exposure to different market sectors.

That includes retail... financial... energy... semiconductors... the Internet... telecom... bonds... biotech... Big Pharma... small caps... and, of course, the NASDAQ, the Dow and the S&P.

With the ETF Options Trader you’ll have the whole market covered... and you’ll be making money as these sectors rise AND when they fall.

So, let me tell you what I will be doing for you on a daily basis... and how I find the options that can deliver to you 50% – 100 % gains just days from now...

Although technical analysis is not always the first place I find profitable plays, it usually plays the greatest role.

The charts can be amazingly accurate at showing what prices are about to do. Technical analysis is, by far, the most practical way to determine when and where to enter and exit positions.

Of course, the fundamentals matter too. That’s why I ALWAYS closely follow the news. I study supply and demand issues, politics and economic events. But when it comes to short-term swings, the technical indicators are the best place to start.

Technical analysis is the best way I know to answer the three key questions of options trading:

• What direction is the stock headed in?
• How far is it likely to run?
• And how long will it take to get there?

Thanks to technology, there are now dozens of reliable technical indicators that can help me answer these questions. I always use several to predict the ebbs and flows of each ETF, but I don’t use TOO many indicators.

What I look for are certain conditions that occur infrequently, but when they do, they provide a very high probability of success.

That may include any combination of moving averages, trend lines, support and resistance points, momentum indicators, trading volume, and many more.

Here are a few recent examples of how technical analysis provided me with highly accurate signals to enter and exit a position.

In October, the Internet HOLDRs Trust (HHH) was nearing a trendline that had served as a clear point of support several times in the past. When it bounced off it again just as expected, I issued a recommendation to purchase December calls.

While most plays take a few days to unfold, or even a few weeks, this one climbed so fast, I took gains off the table right away.

Just one day after we entered, we sold part of the position for a 36% gain and the very next day we sold another portion for a 67% gain.

Around the same time we were going long in the Internet fund, the ETF Options Trader recommended a highly profitable short position on the Semiconductors HOLDRs Trust (SMH).

The short recommendation on the semiconductors ETF was based on several factors, in particular the relative strength index. After a sharp rise, it was screaming that the ETF was overbought and due for a correction.

Sure enough, the price quickly turned around and began falling. Once the reversal was confirmed, I issued a recommendation to purchase puts immediately on the SMH.

Two days later, we sold part of the position for a gain of 50%. Not a bad return in just 48 hours. But I knew the SMH had further to fall.

Sure enough, two weeks later I issued a sell recommendation for an 82% gain.

Here’s what it looked like... the blue arrow represents my buy recommendation and the red arrows are when we sold.

These are just a few of the ways I use the charts to identify conditions that provide a very high probability of success.

But before I make a recommendation, I will always look at a lot more than just the fundamentals and technical indicators. I also want to know what other investors are thinking...

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