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SmartBroker Reference Guide 1996 Smartbroker is a registered trademark of Clint Corporation Copyright Clint Corporation, 1987, 1988 All rights reserved IF you have any questions about this guide or placing an order, please write or send payment to: Charlton Woolard 17280 Anna Southfield, MI 48075 COPYRIGHT NOTICE This guide and the associated software are protected by copyright laws and restrictions. Any reproduction of this guide or associated software is strictly forbidden without prior written permission from Clint Corporation or Charlton Woolard. DISCLAIMER "SMARTBROKER" does not in any way guarantee profits from the stock market and neither Clint Corporation nor Charlton Woolard is in any way liable for personal losses incurred from or as a result of the information provided by this product. DATA SOURCES Dow Jones News/Retrieval (R) is a registered trademark of Dow Jones and Company Corporation. CONTENTS Section 1 INTRODUCING SMARTBROKER 2 REVIEW OF STOCK & OPTION TRADING 3 GETTING STARTED 4 SETTING SYSTEM PARAMETERS 5 UPDATING YOUR STOCK LIST 6 COLLECTING QUOTES 7 ANSWERING ENVIRONMENTAL QUESTIONS 8 RECOMMENDING STOCK PLAYS 9 VIEW REPORTS 10 SMARTBROKER REPORT CARDS 11 OVERVIEW OF SMARTBROKER DATA FILES USER LICENSE AGREEMENT ON-LINE SERVICES AGREEMENT PROGRAM EXECUTION Type "BROKER" to run SMARTBROKER, or type "SB" to display a mosaic Welcome screen before running SMARTBROKER. Type "SBREAD" to view this document on your computer. Type "SBREAD SBDOC1" to view the On- Line Services Agreement. Type "SBREAD SBDOC2" to view User License Agreement. Type "SBREAD SCREENS" to view sample screens produced by SmartBroker. Type "SB5WEEK" to build your 5-week quote trend file immediately, or to perform backtesting. This process may take several hours, but will avoid having to wait several weeks to obtain a 5-week data trend. =================================== 1 - INTRODUCING SMARTBROKER =================================== SMARTBROKER - An Aid For Stock Market Investment Decisions Analyzing Wall Street trends can be a hair pulling experience. There are too many parameters to track, too many unanswered questions, not to mention the challenge of knowing which ones contribute to your final decisions. You either have to be a stockbroker with access to elaborate computerized tools, or prepare to pay for comprehensive brokerage services - and hope you picked the right broker to guide your investment decisions.... Or, you can take hours to manually analyze trends of a few stocks, only to find that the ones you are tracking are not moving enough in the market to suggest an investment. Worst yet, you might buy an expensive piece of software that does the charting for you, but you must decide what it all means. Now, and for the first time you can save time and improve your investment effectiveness by having a SMARTBROKER in your home or office 24 hours a day. SMARTBROKER is a revolutionary software program that does all the analysis work for you and then recommends how to play the stocks you are tracking... Buy Stock? Buy Call Option - long? Sell Stock - short? Straddle Options? etc... In addition, SMARTBROKER will tell you how confident it is in the recommendations it provides. It is very easy to use. SMARTBROKER is a sophisticated software program that utilizes advanced calculus and statistical formulas, combined with your answers to environmental questions to provide immediate insight into the stock market. Consequently, SMARTBROKER provides lasting value from an educational as well as a practical standpoint. And for the first time, it's available for your personal computer !!!!! The nice thing about SMARTBROKER is that you can not only monitor the stocks you are tracking, but you can also monitor the accuracy in the recommendations that it provides. And continue to monitor these recommendations until you feel confident enough to give your broker a call and invest. 4,000 STOCKS !!! Imagine having immediate insight on 4,000 stocks! Most other investment software packages allow you to retrieve 20 or so quotes from Dow Jones and then produce elaborate graphs for you to guess at what to do next !? Invest? Sell? Hope? SMARTBROKER tracks up to 4000 stocks, downloads quotes from Dow Jones quickly and efficiently to save on-line cost, analyzes the data qualitatively and quantitatively, and does what no other software has attempted to do... Recommends what to do next and tells you how confident it is. You'll not only save time from having to make sense of all those confusing charts, you'll become an expert on what to do when, why, and with what stocks. WHEN TO DOWNLOAD STOCK QUOTES It is recommended that you download stock quotes from the Dow Jones News Service every weekend (preferably after Friday's closing), or daily (5 days per week). Of course, you may update your stock list, view reports, update your responses to environmental questions and run new analyses anytime you like. MENU DRIVEN SMARTBROKER is menu driven; allowing you to: - Configure your system - Update the list of stocks you are tracking... Add or Delete a stock symbol - Use advanced communications allowing you to retrieve recent quotes from Dow Jones News Service - Assess world circumstances for SMARTBROKER'S qualitative evaluation - Analyze and recommend stock plays - View reports =================================== 2 - REVIEW OF STOCK & OPTIONS TRADING =================================== Over the last 10 years economist have discovered and rediscovered such topics as capital asset prices, portfolio selection, capital budgeting, efficient markets, beta factors, and so on. The objective, often times, is to characterize stock price movements and ultimately determine, with some degree of accuracy, investment decisions. The truth, however, is that all activities of the stock market are primarily reflected in recorded price movements. Price, (and to some degree volume) is the mechanism through which economist, investors, analysts and academics study market interactions. Movements in investor preferences, psychological factors, technological innovations, and the valuation of companies eventually manifest themselves to some extent through price. Stock prices and stock price movements are the cornerstone of all market instruments and have created the infamous stock option. A stock option is a security giving one the right to buy or sell a lot (100 shares) of stock. In general, the higher the price of the common stock, the greater the value of the option. The value of the option normally declines as the option approaches its maturity date - this occurs more often if the stock price does not change over the life of the option. Since SMARTBROKER's greatest advantage is its ability to recognize profitable option plays, it may prove helpful to further explore the world of options. MORE ABOUT OPTIONS... The owner of an option may wish to exercise his or her right to buy or sell the property if it is economically advantageous. For example, an option to buy a house that you currently are renting, conveys the right to purchase that house at a specified price - possibly a price far lower than its worth later, when it's time to either exercise the option or let it expire. If you were to exercise your right to buy, the seller is obligated to sell at the predetermined price, even if the seller looses in the process. There are two types of options, a call and a put option. A call option is used if the associated stock price is expected to rise. Conversely, a put option is used if the stock price is expected to fall. Both types can be equally profitable providing that the market responds as expected. The market price of the option is frequently called the premium. The price that you want the stock to reach is called the strike price or exercise price and the date of maturity is called the maturity or expiration date. American option contracts can be exercised anytime before the maturity date. MORE ON OPTION NOMENCLATURE... INTRINSIC VALUE - If an option gives the right to buy a particular stock at less than its current market value - or to sell the stock at more than its current market value - the option is said to have intrinsic value. For example, if the market price of IBM is $46 a share, an IBM 40 call would have intrinsic value of $6 a share. If the stock market price was to drop to $44 then the intrinsic value would drop to $4. If the stock price went to $39 than the option would have no intrinsic value as it is less than the strike of $40. However, an IBM 40 put option would have intrinsic value of $1.00. TIME VALUE - If the option has no intrinsic value, its premium will be entirely a reflection of what is known as time value. Time value is whatever sum of money investors are willing to pay in hope that within the time remaining, the option will increase in value. IN-THE-MONEY - Simply another way of saying that the option has some intrinsic value. AT-THE-MONEY - A term that says the market price of the stock is the same as the strike price of the option. OUT-OF-THE-MONEY - If the strike price is higher than the market value of the option as in the $39 example above, or in the case of a put, the strike price is lower than the value of the option. OTHER OPTION STRATEGIES... The diverse ways in which knowledgeable investors employ options has created "multiple option" strategies. Two of these strategies most frequently employed are know as "spreads" and "straddles." SPREADS - Involve being both the buyer and the writer (seller) of the same type of option (puts or calls) on the same underlying stock, with the options having different exercise prices and/or expiration dates. For example, one could buy a DEC June 35 call and sell a DEC March 35 call or even a March 30 call. This strategy can be viewed as rolling your option equity over with time or with the change in perceived value. STRADDLES-Straddles differ from spreads in that a straddle involves purchasing - or selling both a put and a call on the same stock, with the same exercise price having the same expiration date. In this way the option value can move in either direction to be profitable, providing that the movement is great enough to cover the cost of the straddle. The cost of the straddle may be roughly twice either the call or the put, and the commissions would be applied to both. So straddles are relatively safe, but expensive. THINGS TO CONSIDER... USING MARGINS - Using margins is synonymous with using credit. Margin customers must keep securities or cash as collateral on deposit with their brokers. However, options, unlike stocks, cannot be bought on credit. By using the margin loan, one will have more to invest and possibly yield a greater return. The temporary use of the loan is often attractive when the investor is looking to close (or sell his position) in a relatively short period of time. TAX CONSIDERATIONS - Tax ramifications can be quite expensive in option and/or stock trading. It cannot be emphasized too strongly that the investor considering options should consult with his tax adviser before engaging in an option transaction. COMMISSIONS - The impact of commissions on your profits is usually greater for options than for underlying securities. Commissions are especially significant in option strategies calling for multiple purchases and sales of options, such as spreads and straddles. Always discuss commissions with your broker before engaging in options transactions. Be sure, when receiving an estimated percent return or in discussing your break-even point that your commission costs are included in your discussion. WHAT MAKES A RECOMMENDATION ATTRACTIVE... In three words..., ROI, Time (before expiration), and Investment Amount - all of which are presented in the Recommendations Report. Look for the highest Potential first, then look to see how much time the recommended option has remaining, finally determine how much you can invest. Take note of the confidence level provided for each forecast; you might also view the quote file to observe where the particular stock is relative to its recent high and low. After selecting one or a few interesting stock/options in which you might want to invest, call your broker to explore the actual cost and available options on the stocks of interest. Tell him/her that you have a "SmartBroker" that recommended the ones you are about to discuss. CASE EXAMPLES USING SMARTBROKER... % Tosha did not have much money to invest, but she was tired of seeing all the money she could have earned if she had acted on the last few SmartBroker recommendations that were generated over the past few weekends. After another long work week she ran her usual weekend SmartBroker Report of which the recommendation to buy LTD 20 Call Option was reported, at a confidence of 90% and a potential of 112%. Being familiar with "The LIMITED", Tosha decided to give this one a shot. She called her broker and placed an order to buy one Call Option at 2 1/8 or $212.50 plus commission. The broker was discouraging as he informed her that no trades had occurred with that option. Nevertheless the order was placed. Two days later, Tosha called her broker to learn the status of her investment. The broker informed her that LTD 20 Call Option had risen to 3 1/2 and that she had just made a 65% return less commission. Unfortunately, because of Tosha's low level of investment, the commission took all but $47 dollars. However, Tosha was not discouraged. She thought; what would I have earned if I had put $5000 or $10,000 on that Option, and in only two days? The answer was $1,014 and $4,102, respectively. % Mr. Baker was interested in investing, but could not believe that an investment software package could be of any real use. Certainly not more than what he could do by thoroughly investigating the companies in which he bought stock. His niece knowing that her uncle liked to invest in stocks, bought him the SmartBroker Investment software package for his 44th birthday. Since Mr. Baker already had a Dow Jones News Retrieval account, he had nothing to loose so he loaded the software 50 different stock symbols and started to run the software on weekends to build his 5-week data file. On the fifth weekend, he printed out his first valid report. In it were recommendations to buy 7 different call options, 2 put options, 1 straddle, and the stock of 6 different companies. He elected not to act on any of the stock purchases, nor any of the put or straddle options, but after contacting his broker he decided to purchase 5 of the call options (2 of them were not available). Three weeks later Mr. Baker learned that 4 of his 5 options had crossed their break-even and were deep "In-the-money". He yelled with excitement, and wondered 'how many other people were aware of this SmartBroker software. He also discovered: it's not how thorough you analyze a company... it's how consistently you select the right ones, that count. =================================== 3 - GETTING STARTED =================================== SmartBroker package includes: % SmartBroker Reference Guide. % SmartBroker program disk. % One User License Agreement and On-Line Services Agreement. Before you use SmartBroker software you'll need to take a few simple steps. 1. Have all of the necessary hardware components set-up properly. 2. Install the SmartBroker program on your hard disk or working diskette. 3. Configure SmartBroker software to run on your particular hardware. 4. Have a DJNS account and the necessary password to access the information database. 5. Download quotes weekly (on week-ends), for 4 continuous weeks until a 5-week file is built. Once you have established 5 weeks of data for the stocks you are tracking, you may begin analyzing the data. Be sure to run SmartBroker each and every weekend. If you miss a weekend, continue downloading but wait another 4 weeks before your data integrity is restored. REASON: SmartBroker requires 5 continuous stock quotes to operate properly. Once 5 quotes of data is captured, on the next download, a new quote is added and the oldest quote is dropped. SmartBroker will always maintain the last 5 quotes of data. 1. REQUIRED EQUIPMENT: SmartBroker operates on the IBM PC, or any other TRULY 100% IBM compatible personal computer with at least 640K of memory. You will also need: % An 80 column color or monochrome monitor with appropriate display adapter. % One double sided disk drive, or a hard drive. A hard drive is preferred for faster data transfers. % A Hayes or Hayes-compatible modem or Omnitel, Novation, SSM, or other RS-232 compatible modems and an RS-232 cable. % A standard modular phone jack (RJ11, RJ12,RJ13). % A parallel or serial printer and interface (optional). % Several blank diskettes (optional). 2. INSTALLING SMARTBROKER: If you want to install SmartBroker on a diskette, rather than a hard drive, you should format a diskette. Refer to the Format command in your Dos Operating System (DOS) manual. 1. Turn your computer on. You should have the DOS that came with your computer either on the hard disk or on a system diskette in Drive A. 2. Put the diskette labeled SmartBroker in Drive A. 3. The prompt on your screen should be A>. If it is not, enter A:and press ENTER. 4. If you want to install SmartBroker on a hard disk, enter SBNSTALL C (or the letter of the hard disk where you want to place the SmartBroker program). The installation program will make a subdirectory name \SMART on the specified drive for SmartBroker programs and data files. 5. You will see additional instructions or messages about SmartBroker installation on your screen. 6. The program will copy SmartBroker from the original diskette to your hard disk or diskette. 7. After all SmartBroker files are successfully copied, SmartBroker can be executed by typing BROKER in the \SMART directory. If you are in the root directory, type CD\SMART and press enter and then type BROKER and press enter to execute the program. 3. CONFIGURE YOUR SYSTEM TO RUN SMARTBROKER: Backup Procedures - Dual Diskette System If you run SmartBroker from a diskette, keep at least one backup copy. The backup copy is very important to protect you should a diskette fail or a file become corrupted. The System Diskette, the one you use in drive A, contains programs and your system setup information. Make a copy of this diskette after you install SmartBroker and enter all the System Setup information. To make backup copies, use the following procedure. 1. Put your DOS diskette in drive A. Type: DISKCOPY A:B: 2. When prompted, put the source diskette in drive A, and press ENTER. 3. When prompted, put the destination diskette - the diskette onto which you want to backup your files - in drive B, and press ENTER. The entire contents of the disk in drive A will be copied to the diskette in drive B, erasing anything that was previously on the disk in drive B. Backup Procedures - Hard Disk System If you run SmartBroker from a hard disk, you should keep at least one backup copy of SmartBroker and its data files. The backup copy is very important, should your computer or hard disk fail or a file become corrupted. To backup data files, follow this procedure. 1. Put a blank formatted diskette in drive A. 2. Type COPY C:\SMART\SB*.SBF A: and press ENTER. This assumes that you have set up SmartBroker to save data files on the C: drive in a subdirectory name SMART. If you save data files on a different drive or directory, modify the COPY command. AUTOPILOT MODE !! Smartbroker has an "autopilot" mode which allows all sequence of operations to occur automatically. The autopilot mode is set by simply typing 'autopilot' or 'auto' after the name of the program. In autopilot mode, two files SBDATA.SBF and SBSTKLST.SBF will be copied for backup protection to SBDATABK.SBF and SBLISTBK.SBF respectively. When in autopilot mode, a message screen will alert you that you have 5 minutes to disengage the countdown by simply hitting any key. After terminating the countdown, the computer will be freed for general use. When the countdown is completed Smartbroker checks the file "SBAUTOPI.sbf". If the first number in this file is less than 57 then Smartbroker increases the second number in the file by one. When the second number matches the first, the program performs all functions automatically. This flexible feature is ideal for daily checks, and automatically performing weekend evaluations without human interaction. Simply use a daily electrical power timer with your computer and modem, set for say...midnight. In the file "SBAUTOPI.SBF" set the first number to 7 and, the second to 1 on a weekend. If however, the first number is set to 57, then Smartbroker will run automatically 5 sequential times, skip 2 times, and repeat this process (this is good for daily (5 days) automatic execution versus once a week). You can change these settings using any ASCII text editor. Example 1: M T W Th F Sa Su Saturday Morning Run Setting 7 7 7 7 7 7 7 (settings as seen in the pm) 3 4 5 6 7 1 2 Example 2: Weekday-Early Mornings Run 57 57 57 57 57 57 57 (settings as seen in the pm) 1 2 3 4 5 6 7 Example 3: Once Monthly (every 30-days) 30 30 30 30 30 30 30 (settings as seen in the pm) .. .. 28 29 30 1 2 If you want to engage autopilot immediately (without waiting for the 5 minute countdown) type in the parameter "now" e.g. 'Broker AUTO NOW' or 'Broker now'. In summary, the 3 modes of execution are: normal (by typing "broker"), autopilot ("broker auto"), and autopilot now ("broker auto now"). . . "BROKER auto" - updates a counter file and allows 5 minutes for decision time before running Smartbroker. This is handy if you are using a timer, and set the counter file to 7 over 7 (meaning every 7th time this program is executed, run Smartbroker on autopilot mode. A dedicated computer connected to an electrical timer that boots up "BROKER auto" everyday, can run SmartBroker only on weekends without user interface. You can interrupt the countdown sequence and enter directly into the program by hitting a slash ('/'). If your printer is turned on as well, a printout of your recommendation report and key categories report is produced. . "BROKER auto now" - simply by-passes the 5 minute wait, and the counter file, and runs Smartbroker in autopilot mode immediately. . "BROKER" - the normal mode, runs Smartbroker as a basic program requiring constant user interface throughout the keyboard. Other Parameters: Typically SmartBroker will extract the "LAST" trade quote from the Dow Jones stock quote file (the one that is downloaded from DJNS). However, if you want to extract "CLOSING" prices instead, simply type the parameter "\close" after the program name or after other parameters. NOTE: If there were no "Last" price (due to no trades), Smartbroker will adopt the whole number only (the fraction, if any, is ignored) part of the last closing price to maintain a degree of trend consistency. Otherwise, the price trend will drop drastically to zero - which would be misleading. SmartBroker Prognostics: When SmartBroker first begins, a prognostic system check is initiated which will alert you of any foreseeable problems. You might not want SmartBrokers Prognostic System check to pulse all your com lines, as other com lines may be actively used for other purposes. To avoid the system check, include a "\p" on the command line next to "broker". This will by-pass the total system check and direct the display right to the master menu. If you do not have communications capability due to an absence of a communications port, a message will appear to alert you to this fact. Peripherals, such as your printer and your modem, will be pulsed to determine if they are on or working properly. All data files will be searched to assure that all files exist. If any file is missing, SmartBroker will alert you of its absence and provide you with storage information in case there is not enough room on your disk. All files in the current directory will be checked to determine if they are "hidden" from the user interface system, and your system will be analyzed to determine its color capabilities. In summary, Smartbroker checks for: - Current DOS version - com ports operational - color capability - the first four files: SBSTKLST.SBF SBCF.SBF SBDATA.SBF SBSTOCKS.OVR are checked for verification. If ok, and in autopilot mode then SBSTKLST and SBDATA are copied to backup files to protect against any unusual interruption. If not in autopilot mode or after these are verified then the following 12 additional files are checked: SBQUOTES SBQ1 SBRESULT SBRECRD SBRECMD SBHIST SBAUTOPI EGA.BGI HERC.BGI IBM8514.BGI PC3270.BGI CGA.BGI Next, SmartBroker will check to see if your printer is ready, if your modem is operational, determines available disk space and available memory, and checks for any hidden files in the current directory. If there are no foreseeable problems, Smartbroker will immediately display a Welcome Screen. At this point, press any key to access the Master Menu. A Subtle Goodie... Please note that while in color mode, the words "Master Menu" of the main menu screen will be displayed in the dominant color of the module you last accessed. The feature is provided to help you keep track of your last option choice, should you become interrupted or distracted and forget where you were. In addition, all options previously visited will display a "check" symbol before its menu item. =================================== 4 - SETTING SYSTEM PARAMETERS =================================== % Use the Space Bar to change an option. % Use the Return or Enter key to select the option. % Use Escape to exit from the configuration screen. Selecting "S" from the Master Menu allows you to set SmartBrokers' System Parameters. Most of which are related to its powerful communications capabilities. With the exception of your access phone number and your password, SmartBroker frees you from having to memorize the various parameters by offering them to you in a multiple-choice format. Simply press the space bar and a new parameter appears. Hit return and SmartBroker will accept the parameter you chose. NOTE: If you hit space and nothing happens, hit space again. There are 16 categories: COMMUNICATION MODE: Automatic, Log-On Only, Manual Automatic - performs all communications necessary to download stock data from Dow Jones News/Retrieval Service. You will need to have already entered and stored your password and a local access phone number. Log-On Only- performs automatic log-on to DJNS. Leaves user in Manual Mode after log-on is complete. Manual - basic communications capability - no automatic transfer of data. You will have to type all data to be transmitted. However, you can use this feature to communicate with any service or any other computer for any purpose. Essentially you have multi-purpose communications software when in this mode. ACCESS LINE: Select either Telenet/Autonet or Tymnet access lines. The corresponding phone# will change accordingly. PHONE NUMBERS: Enter the phone number of your local access line here. A phone number for both Telenet and Tymnet may be entered. DIALING METHOD: Pulse, Tone If you have a touch tone telephone line/modem, set this parameter to 'tone'. If you do not have touch-tone, set to 'pulse'. While tone is much faster than pulse, you can use pulse even if you do have a touch-tone line. DJNS PASSWORD: Enter your password to your DJNS account here. Your password is always protected by SmartBroker. You will never see it again, so be sure to write it down in a special place. COM PORT: COM1, COM2, COM3, COM4 Select the port your modem is connected to. Use COM1 as your first choice. BITS PER SECOND: 1200...57600, Select the baud rate of your modems capability. BPS1200 is the default rate, however 14,400 is preferred if your modem is capable of this rate. PARITY: EVENPARITY, ODDPARITY, NOPARITY Select EVENPARITY for DJNS. WORD SIZE: 7, 8 Word sizes are typically 7 or 8 bits. Use 7 for connection with DJNS. STOP BITS: 1, 2 Use stop bit of 1 for DJNS. 2ND CALL: OPTIONS, NEWS, BOTH, OFF Activate the option of a second phone call to DJNS to retrieve options prices for option recommendations, news headlines for all stock recommendations, both, or set to 'off' for neither. When "key categories" is selected and second call = News or Both, New-Headline information for the top 10 stocks expected to fall, and top 10 expected to rise will be captured in the NEWS Report (and can be seen through the VIEW Option). NYSE STOCKS, O-T-C, OR BOTH You may select between either NYSE stocks that are traded on the floor,or over-the-counter stocks which are traded by market makers, or both. A brief comparison of the two stock types is provided below. NYSE stocks: (3 or less characters per stock symbol) . are auctioned on the floor . has restricted price swings . has less risks than OTC stocks . usually of larger companies with high capital spending. Over-The-Counter stocks: (4 or more characters per stock symbol) . are traded by market makers . have potential for greater price swings . typically have higher risks . usually of companies with less capital spending. ANALYSIS RESTRICTION: Select any one of 36 different analysis restrictions. GEN. RECOMMENDATIONS all stocks evaluated CALL OPPORTUNITIES = stocks which were recommended to buy call options PUT OPPORTUNITIES = stocks which were recommended to buy put options UPWARD TRACK any stock with average slope >= 0 DOWNWARD TRACK any stock with average slope < 0 MATERIALS STK GRP (self-explanatory) CONSUMER STK GRP self-explanatory) ENERGY STK GRP (self-explanatory) FINANCE STK GRP (self-explanatory) INDUSTRIAL STK GRP (self-explanatory) TECHNOLOGY STK GR(self-explanatory) UTILITY STK GRP (self-explanatory) OTHER STK GRP (self-explanatory) HILL/VALLEY POSITION = if the magnitude of the last slope is less than 150% of each of the previous MOST VOLATILE STOCKS # largest std deviation OVER-PRICED STOCKS # highest stock prices relative to normal price range with decreasing volume activity GREATEST LAST DROPS # (self-explanatory) GREATEST LAST RISES # (self-explanatory) SB STOCK PICKS # most volatile and in lowest range of it's price range and with sudden interest in volume activity MOST ACTIVELY TRADED # highest volume KEY STOCK CATEGORIES # ** (only if stock list is greater than 20) S.T. DROP CANDIDATES # highest recent price, and price range is greater than 25, and is in the 70%+ range of its price range, and price is greater than 50 and volume is not high. This stock is also categorized as "HillTop" and there is no sudden interest in volume activity. RECENT SHARP TURNS # biggest price swing reversal CURRENT VOLUME PEAKS (self-explanatory) ASSERTIVE INCLINES # greatest average slope (+) ASSERTIVE DECLINES # least average slope (-) MAX %$ MOVEMENT # (self-explanatory) GREATEST NEW LOWS # greatest new lows by more than 1 GREATEST NEW HIGHS # greatest new highs by more than 1 PROBABLE SPLITS # greatest gap between highest and current price, and where historic highest has exceeded 50. MOST STABLE STOCKS # smallest standard deviation LEAST TRADED STOCKS # lowest volume LOW PRICED STOCKS # (self-explanatory) SUDDEN INTEREST STKS (sudden upturn in volume activity) SUDDEN DISINTEREST # (sudden downturn in volume) UNSUPPORTED MOVEMENT # (price fluxuation unsupported by volume activity) ** Key stock categories. The most traded stocks that are also most volatile are highlighted. NOTE: The '+' or '-' in front of stock symbols indicate that the current price either exceeds (+) or is below (-)the "normal" trading range for that stock. # Prioritized listing (selected in priority order). SmartBroker will scan all stocks for these selections. MINIMUM FORECAST (%): 1..50 Set the percent level that must be met or exceeded between current and forecasted prices, in order to be considered for recommendation. You may use the "-" key to reduce values. SOUND CONTROL: ON, OFF Set whether you want sound tones throughout the execution of SmartBroker. SCREEN DISPLAY: COLOR, BLACK & WHITE You can select whether you want the program to run in color or in black & white. After all parameters are set, hit the ESC key. You will be prompted to answer Y or N as to whether to save the configuration. Hit Y if you wish to save this configuration. Hit N if you do not wish to save this configuration. All parameters will be recognized whether they are saved or not. =================================== 5 - UPDATING YOUR STOCK LIST =================================== Selecting "U" in the Master Menu will allow you to Update your list of stock symbols by either adding new ones or deleting symbols that you no longer intend to track. A screen which lists the symbols you are tracking will appear. The heading at the top of the screen will also reconfirm the number of stocks you are tracking as displayed in the list. The prompt at the bottom of the list will allow you to enter either an "A" or a "D" to Add or Delete a symbol. You may track up to 4000 stock symbols, or you may track only one. There are no other restrictions. You may have them arranged in alphabetical order either by stock symbol or by company name when you re-save the file. ADDING : When adding a stock symbol enter the actual symbol. It does not matter whether you are typing in lower or upper case. SmartBroker will always convert to upper case. You will also be asked to enter the company name and the stock category. Only 5 characters are allowed for the stock symbol, and only 17 characters for the company name. In addition, the list of stock symbols will always remain alphabetized for easy visual searching. A pause of a few seconds may occur to allow for the alphabetization process. If there are any double entries, the first of the double will be deleted. When a new symbol is added, it may appear to be right justified and highlighted before it is saved. This allows you to quickly and easily see which symbols were just added in case you want to make an immediate correction or change. Note: symbols of 5 characters or more will not appear to be right justified as there are only 5 characters available. NOTE: If there is a particular stock that you are tracking, and would like to be reminded of its price when you first enter the Stock Recommendations option, you can identify this stock by typing a '~' in front of the company name. Only one can be tagged in this manner. After the next download, this stock and it's price will be displayed in the Reminder Screen. DELETING: When Deleting a symbol enter the NUMBER of the symbol (not the symbol). By entering the number rather than the symbol, you are assured of deleting the correct symbol. You may also delete a range of numbers by entering the starting number, and the final number, and separating both by a "-". Again, the list of stock symbols will always remain alphabetized for easy visual searching and the total count of symbols on your list will be reduced with each deletion. If you make a mistake, simply do not save the modified list. Your previous listing is maintained until you resave the list. CATEGORIZING: After you have entered a new stock symbol, you will be asked to select a category. A menu of stock categories will appear to help you select. This will help in applying restrictions in later analysis. When you have finished updating your stock symbol list, enter ESC for escape. You will be asked whether you wish to replace your current list. If YES, your new list will be saved. IF NO, you will be returned to the Master Menu. NOTE: From time-to-time, you may notice a reduction in the list of stock symbols you were tracking. Smartbroker automatically eliminates stocks that are no longer supported by the DJNS. Occasionally, companies are acquired and the stocks are no longer traded, or the company name has changed which forced a change in the stock symbol. When the downloaded response returns with "STOCK SYMBOL IN ERROR", Smartbroker will automatically search and eliminate that stock from your list as it is no longer valid. This elimination process is limited to 25% of the stocks you are tracking for safety precautions. SELECTING STOCKS... When selecting stocks, you may want to select those stocks that have known options contracts associated with them. Since SmartBroker's greatest strength is in its ability to recommend profitable options contracts, the selection of your stocks will have a direct impact on what SmartBroker can do for you. =================================== 6 - COLLECTING QUOTES =================================== Selecting "C" from the Master Menu allows you to collect quotes from DJNS. It is the communications feature of SmartBroker. Because any analysis software is only as good as the information it is analyzing, the communications capability within Smartbroker is especially powerful. Unlike most communications packages, this feature within SmartBroker allows for total automatic communications with the DJNS. Once the parameters are set, you may never need to know your password, your access phone number or any other parameter. SmartBroker will use this information to routinely dial your access number, Log on to DJNS, sign-on to the CQE (Current Quotes Exchange) option with the news service, request and download quotes relating to the stock symbols you are tracking, and when done, disconnect, log-off and hang-up completely automatically. However, you may set the communications to manual, and take advantage of a general purpose communications package comparable to packages sold today for hundreds of dollars. Telenet/Autonet & Tymnet SmartBroker communications uses both Telenet and Tymnet access lines. If for some reason a carrier is not detected after dialing, it will retry a total of 5 times (the first two using tone dialing and other three times using pulse dialing). If one access line continues to prove unsuccessful for the entire 5 connect tries, Smartbroker will automatically switch to the alternate access line, provided you've entered a phone number for the other line. If still, for some reason the log-on sequence is unsuccessful, and the autopilot mode is active, Smartbroker will hang-up and re-attempt the log-on sequence a maximum total of 20 times. Further, if while in autopilot mode, the entire download sequence is interrupted, or is not completed, SmartBroker will attempt the entire downloading sequence again, and if necessary, again (for a total of three tries). Before actual communication is initiated, SmartBroker will check to see if your modem is on or operational. If it is not, you will receive a message stating that "Your Modem Is Not Working". This may simply mean "turn your modem on". Next you must decide whether you want to save the downloaded information on disk. THIS IS A MUST IF SMARTBROKER IS TO USE THE DATA. Typically you would respond by typing 'Y' for Yes. After doing so, your communications port will be opened and your access phone number will be transmitted to connect you to the DJNS. If your modem is not on at this point, or a problem is encountered during any aspect of automatic communications, SmartBroker will transfer mode of operation to "Manual Mode." In this case either type the remaining information manually or enter ESC to close communications and terminate. IF AT ANY POINT DURING AUTOMATIC DOWNLOADING OF STOCK QUOTES, YOU DECIDE TO TERMINATE COMMUNICATIONS - SIMPLY PRESS THE ESC KEY. YOU WILL HAVE TO WAIT FOR THE TIMING SEQUENCE TO END BEFORE THE TERMINATION REQUEST IS HONORED. If this communication effort is (for some reason) terminated abruptly, and in autopilot mode, Smartbroker will terminate communications, pause for 10 seconds, and reinitiate the entire communications tasks. If not in autopilot mode and a communications problem occurs, communications will switch to manual mode. Once you have downloaded your quotes (retrieved from last reported 'closed') or terminated communications, you will have the option of using this information for SmartBroker evaluation. Answer "Y" to the question: UPDATE DOW JONES STOCK-DATA FILE (Y/N) ?" With automatic communications, the quote data is stored in file SBQUOTES.SBF. Hit RETURN so that the file SBQUOTES.SBF may be read and quotes extracted for analysis. If you have stored DJNS //CQE data in another file, you may type the name of that file at this time. SmartBroker would then attempt to extract the quote information from the file you suggested. When the quotes are all processed, you will be given an option to replace your old quote-file or to abort. If you replace your old file, it is gone forever. You should only replace your old quote file once a week on week-ends. If you replace your old quote file out-of-sequence; that is, at some time either before your weekly update or sometime afterwards, you will destroy your 5-week trend and will have to wait 4 additional weeks before your proper data sequence can be restored. After all quotes have been downloaded, Smartbroker reads this file character-by-character, word-by-word (as do we humans) and vertically from top to bottom (unlike us humans). Volume information is read and again rechecked. Both stock closing prices and volumes are extracted for each symbol. If bad fractions are found they are listed for your information. If the stocks symbol has not changed but the company name has, the company name is updated to reflect the new name. Newly added stock symbols are first checked for duplication and validity before they are accepted. Next, Smartbroker matches information from the quote file with information from the 5-week data file and updates the 5-quote data file by adding the latest quote to the end and dropping the earliest quote (5 quotes old) from the beginning of the list. NOTE: It is recommended that you collect your stock quotes between Friday after 8 pm and before Monday 6 am to minimize your on-line cost. =================================== 7 - ANSWERING ENVIRONMENTAL QUESTIONS =================================== In general, world events have a significant effect on stock price fluctuations. For this reason, SmartBroker, by asking a number of questions, allows for your input regarding world events/climate. By selecting "A" of the Master Menu, you will be asked a number of questions regarding domestic and world issues. You should familiarize yourself with the answers to these questions and periodically update the Environmental Evaluation portion of the software. IT IS RECOMMENDED THAT YOU UPDATE THIS SECTION ONCE EVERY 3 MONTHS. The questions posed are related to: The prime interest rate Current inflation Economic state Housing starts Political control Global relations Domestic manufacturing production Stock market trend in January of this year After responding to a scale from 1 to 5, you will have the option of saving the answers. You must input a number from 1 to 5, or the question will continuously re-appear. Answers are tabulated and correlated as to whether they have an upward/increasing or downward/decreasing effect on the SmartBroker stock price forecasts. NOTE: SmartBroker will only recognize the answers to these questions when they are saved on disk. If you change your answers, you must save the results for the answers to be recognized. =================================== 8 - RECOMMENDING STOCK PLAYS =================================== Selecting "R" from the Master Menu positions you in the most critical module of the SmartBroker software. This is the module that, when all preceding modules have been attended to, will provide you with great insight and clear recommendations regarding how you might consider investing in the stocks you are tracking. The ultimate objective is to generate a Recommendations Report that will highlight stocks with profit potential and offer a recommendation on how you might invest in particular stocks or stock option. After selecting "R", a second menu allows you to choose the level of interaction you would like to have with SmartBroker. Once a level is chosen, you are then asked if you want to analyze a particular stock. If you do, you would enter "Y" and the letters of the stock symbol you are interested in at the next inquiry. If you select Levels 1 or 2, this would be your last question before the analysis begins. If you select Level 3 then you are asked whether or not you want to generate a new Recommendations Report. If so, you will replace your previous report. If not, then your old report will remain on disk. NOTE: By hitting 'R' you initiate a comprehensive market scan of all stocks. A summary will be provided before the secondary menu is displayed. If you are selecting this option for the first time or hitting 'R', the market scan will also activate, otherwise the secondary menu bar is immediately displayed. If there are some unusual price swings, the associated stocks will be displayed on the screen. NOTE: The '+' and '-'s in front of some stock symbols indicate that the current price either exceeds (+) or is below (-) the "normal" trading range for that stock. NOTE: SmartBroker will not recommend or allow you to analyze in full, stocks that have severely abnormal price swings. "Severely abnormal" is defined as: having a standard deviation greater than any price, or, any price greater than the average price plus 3 times the standard deviation, or, any price less than the average price minus 3 times the standard deviation, or, any price greater than 150% of the average price, or, any price less than 50% of the average price. Sometimes, stock splits occur, which can make price trends look superficially good, or superficially bad. Here is a closer look at what each level provides: ┌─────────┐ │Level 1 │ └─────────┘ (For the investor who wants to see what SmartBroker sees in its analysis) Provides the greatest amount of detail regarding the SmartBroker analysis. You are prompted after every display to hit any key in order to continue. Entering ESC will allow you to exit at any time. A trend graph is displayed along with various statistical parameters and interpretative comments on the stocks 5-quote trend. Tables are also provided to give you more information regarding each stock and stock option profit making potential. You may also elect to search for a particular stock symbol or a series of stock symbols by searching for a unique string of characters. Various stock investment strategies are offered for your consideration as appropriate. You are not allowed to erase your existing Recommendations Report or generate a new report in this level. You can only generate a new Recommendations Report in level 3. ┌─────────┐ │Level 2 │ └─────────┘ (For the investor who wants to view what SmartBroker sees in its analysis, but not be required to hit a key to continue) Same as Level 1 except you do not interact with the computer to continue. Each display will remain on the screen for only a brief amount of time. The program will continue automatically until all data items have been read and analyzed or until you enter ESC to exit. You may determine the relative amount of pause time for each screen by selecting a number from 1 to 9 for the time delay. 1 is the fastest or shortest amount of time allowed while 9 is the longest. Typically, 1 equates to approximately 2 seconds per display while 9 equates to approximately 18 seconds per display. NOTE: When in level 2 you may freeze the screen any time by hitting any key. Hitting a key a second time continues the automatic display sequence. ┌─────────┐ │Level 3 │ └─────────┘ (For the investor who only has time for the bottom-line) Level 3 bypasses the task of displaying all of its technical analysis and gets right down to the heart of the matter - which stocks have profit potential and how should you try to invest in those stocks. This option recognizes the saved answers to the environmental questions and assess an "environmental impact" percentage which is flashed right before the recommendations report is displayed. The % environmental impact is a percent the forecast price was either increased(+) or reduced(-) from the mathematical projection. After this percentage is flashed, a Recommendations Report is generated and displayed on the screen. If you said "Y" to the question "Generate a new recommendations report?" the information generated on the screen with confidence levels of 60% or higher, is also being saved on your disk. You may view or print this information anytime by using the "V" option in the Master Menu. If less than 5 quotes of data is in your file, that particular stock will be ignored. NOTE: If your system is set to perform a second call to DJNS for either option quotes or news headlines or both, then Smartbroker communications will reactivate to retrieve the requested information on only those stocks recommended. NOTE: While viewing the Stock & Volume screens in this option, any odd function key (f1, f3, ..f9) will paste the price trend plot on your screen. Any even function key will place the option codes on your screen for quick reference. =================================== 9 - VIEW REPORTS =================================== Selecting "V" allows you to view and print any one of ten key SmartBroker data files. You may be prompted to hit 'S' for "search" to search for specific words. The following reports are available for viewing: DJNS Stock Quotes - the data sent by the DJNS which comprises stock quote information. Forecast Report Card - the report card that SmartBroker keeps on itself. A new report card is initiated every 5 months. Recommendation Report Card II - captures the forecast accuracy of only those stocks selected for stock play recommendations. Summary information is available for the later half of each month that is 4 months old. This report maintains information for up to 5 months. Historic Recommendations Report Card - this file captures forecast accuracy from both the Forecast Report Card and the Recommendation Report Card II. Stock Data File - the 5 quotes for each stock that SmartBroker uses to establish its trend analysis. Stock Symbol/Company List - the list of stock symbols and associated companies that you are tracking. Option Quotes - latest file of requested option prices from stocks option recommendations. Dow Jones News - latest file of reported headlines on recommended stocks. Traders Dictionary - a listing of key trader's terms. Stock Recommendations Report - the ultimate file that provides the SmartBroker recommendations regarding which stocks are perceived as having profit potential and how you might consider investing in them. After making your selection you will be prompted as to whether you want to print the file you selected as you view it, and whether you want the screen to pause or scroll continuously. If your printer is not on, a message will appear alerting you to that fact. Hitting any even numbered function key while pausing will display the option codes used by most brokers for option, strike price and expiration date identification. NOTE: Page-UP, or the Home, key will take you back to the beginning of the report/file you are viewing. The ESC key will exit out of the report viewing module. =================================== 10 - SMARTBROKER REPORT CARDS =================================== After exiting SmartBroker, you will be prompted as to whether you want to update your report cards. YOU SHOULD UPDATE YOUR REPORT CARDS AFTER EVERY RUN THAT GENERATES A NEW RECOMMENDATIONS REPORT. There are two modes of operation for the Forecast Report Card: 1) INITIATING A NEW REPORT CARD and 2) UPDATING A REPORT CARD. Forecast Report Card - The initiation of a new report card occurs automatically every 5 months and will monitor the forecast of SmartBroker for the life of that report card (5 months). During the 4th month, a message informing you that next month will be the last for this report card cycle will appear throughout the duration of that month. The purpose of this message is to provide you the opportunity to view/print the report card before the fifth month occurs, during which time the last five months of data is erased and a new report card is initiated. The report card lists : % date of initiation, % date of the report card, % stock symbol, % forecasted trend (either Up or Down), % price when the stock was initiated, % long-term forecasted price (within 6 months) of the stock, % lowest quote to date, % highest quote to date, % a grade. The REPORT CARD is a useful tool that enables you to watch the accuracy grow as time passes before actually putting your money on the line. After watching SmartBroker Forecast Accuracy reach 75-80% several times, you'll build confidence in SmartBrokers' ability to accurately forecast stock prices. Recommendation Report Card II - The Recommendation Report Card II is similar to the Forecast Report Card except it only captures information on those stocks recommended, versus all stocks tracked. Additional "investment efficiency" information is provided for the first month of this ReportCard as well as the entire ReportCard. Historic Report Card - The Historic Report Card keeps an historic record of the accuracy of SmartBroker's forecast ability as reported by both Forecast Report Card and Recommendation Report Card II. NOTE: While both report cards are automatically timed and maintain information for a fixed cycle of time, both may be reinstated to scrap all previous information and initiate a new cycle. To forcefully initiate a new cycle, enter '1' for the Forecast Report Card or '2' for the Recommendation Report Card II when asked "DO YOU WANT TO UPDATE YOUR REPORT CARDS?" which appears when exiting the program. If there are no recommendations when you elect to force a new reportcard II, your old reportcard II will not change (except for the date). =================================== 11 - REVIEW OF SMARTBROKER DATA FILES =================================== The critical data files Required for SmartBroker are described below: SBCF.SBF: Configuration parameters. SBSTKLST.SBF: The list of stock symbols being tracked and company descriptions. SBQUOTES.SBF : The downloaded data received from DJNS. SBQ1.SBF : The numeric answers to the environmental questions. SBRESULT.SBF : The recommendations report generated by SmartBroker. SBDATA.SBF : The 5-quote stock trend data that is kept updated at each run. SBRECORD.SBF & SBRECRD.SBF : Forecast Report Card files. SBRECOMD.SBF & SBRECMD.SBF : Recommendation Report Card II files. SBHIST.SBF : Historic Report Card file. SBAUTOPI.SBF : Autopilot file. EGA.BGI, HERC.BGI, IBM8514.BGI, PC3270.BGI, CGA.BGI : Graphic files. SBOPTION.SBF : Recommended option quote file. SBNEWS.SBF : Dow Jones News Headline file. SBDICT.SBF : Trader's Dictionary. SBSTOCKS.OVR : An overlay file critical to the operation of SmartBroker. COMMUNICATIONS and OTHER PROBLEMS Below are frequently found problems and potential causes: CONNECT BUT NO CONTINUATION OF LOGON SEQUENCE . Problem: Telenet access phone number in the Tymnet entry, and vice versa. . Problem: Wrong baud rate: phone number does not support the baud rate you are using. Check for the correct baud rate/number pair or try lowering the baud rate. CAN'T FIND THE CORRECT COM PORT . Some computers are configured to switch com ports in order to share a communications adapter. SmartBroker accesses the com ports initially in the prognostic check, and again when actually trying to connect. This condition can cause SmartBroker to attempt to use com1, when your modem is actually configured to com2. If you have a "digiboard" or other board that allows for shared communication adapters, you can switch off SmartBrokers' prognostic check by using the "\p" option on the command line (i.e. "Broker \p"). However this will prevent you from learning of other potential problems before SmartBroker begins. CONNECTS AT LOWER SPEEDS BUT NOT AT HIGHER SPEEDS . Problem: Modem does not support higher speed . Problem: Telephone access number does not support higher speed. You will need to find the correct access phone number for the speed you desire. . Dow Jones does not support the speed at which you are transmitting. MODEM NOT RESPONDING . Modem dip switches not allowing software to control modem operation: check dip switch settings. . Modem is not 100% Hayes Compatible SHAREWARE - ONLY COM1 . Some Bulletin Boards carry a SmartBroker Shareware version that only supports COM1. Please check your shareware program description or try to run the program on COM1, or on another computer with COM1. Since it's shareware, and not the fully registered version, you're only evaluating it temporarily anyway - right? PROGRAM HALTS AND REPORTS ERROR WHEN ACCESSING FILES . Your CONFIG.SYS file in your root directory does not have a line in it that reads "Files=30" or higher. Consult your DOS manual for more details. . Be sure you have 640K RAM of BASE MEMORY on your computer. Extended or Expanded memory is not important. . TSR (Terminal Stay Resident) program is active and taking up too much memory. You will have to eliminate the TSR before running SmartBroker. CAN'T COMMUNICATE WITH PCjr . PCjr handles communications differently than normal IBM Compatible Machines and therefore is not 100% IBM PC Compatible. Many Bulletin Boards have files (COMSWAP.ARC) that you can download and run before running SmartBroker that compensates for the communication differences. You may have to set SmartBroker to run on a different COM port. I GET NOTHING BUT GARBAGE WHEN I USE TELENET OR TYMNET . Set the Parity to Even, the Word size to 7, and the Stop Bit to 1. INFORMATION ONLY ---- PORT ADDRESSES: serial ports use special addressing space on the computer. Each port address is unique; no two ports can have the same address. The computer cannot talk to the devices if the ports they use have the same address. SmartBroker recognizes the standard port addresses: COM1=03F8, COM2=02F8, COM3=03E8, COM4=02E8. INTERRUPTS: serial ports have a way to tell the computer that the device they are linked to needs attention (for example, each time you move your mouse, the serial port lets the computer know about it so it can respond by making the corresponding pointer movements occur on the screen). The signal sent is called a "serial port interrupt", or IRQ. You can connect and operate two serial ports at the same time without problems. COM1 and COM3 share the IRQ 4 COM2 and COM4 share the IRQ 3 Sharing an IRQ only works if the two devices are not active at the same time. USER LICENSE AGREEMENT Limited Use Charlton Woolard (hereafter referred to as "Developer") hereby grants you a limited, non-exclusive license to use "SmartBroker" software program (hereafter the "Software"), as well as the diskette ("Diskette") and the printed documentation ("Documentation") contained in the accompanying binder, in the manner described in this Agreement. The Software and Documentation are copyrighted and all rights are reserved to "Developer" or the parties under whose license "Developer" provides the Software (the "Software Originators"). This version of the Software is shareware and may be freely distributed on bulletin boards, online services, and CD-ROM's. The user may evaluate the Software without charge for no more than thirty days; use beyond thirty days requires payment to the Developer. Any other rights beyond those mentioned here to copy, duplicate, modify, adapt or lend, sell, or otherwise transfer the Software, Diskette or Documentation remain with the Developer. Further, after payment the license of the Software is personal to you and may not be sublicensed or otherwise transferred to any third party. You are granted no right to use the source code of the Software in any manner. Database Information The Software enables you to access information from various databases ("Database Information"). The Database Information is owned by certain other companies and entities, including but not limited to various securities markets, such as stock exchanges, and their affiliate (collectively, "Information Suppliers"), and is protected by copyright. The Database Information is provided solely for your personal use, and may not be copied (except in connection with your personal, non-commercial use of the Software), retransmitted, sold or distributed in any way by you. 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YOUR SOLE AND EXCLUSIVE REMEDY FOR ANY BREACH OF WARRANTY IS THAT "Developer", AT ITS OPTION, EITHER WILL REFUND YOUR REPAYMENT FOR THE SOFTWARE UPON YOUR RETURN OF THE DOCUMENTATION DISKETTE, AND COPIES (IF ANY), OR WILL TAKE ONE OF THE FOLLOWING ACTIONS: If the Diskette is not as warranted, "Developer" will replace it on an exchange basis without charge. If the Documentation is not as warranted, "Developer" will replace any defective pages or supply addenda on an exchange basis without charge. If the Software does not perform as warranted, "Developer" will replace it with a new copy of the Software on an exchange basis without charge. THE DATABASE INFORMATION ACCESSIBLE WITH THE SOFTWARE IS PROVIDED "AS IS." THERE MAY BE DELAYS, OMISSIONS OR INACCURACIES IN THE DATABASE INFORMATION. THERE IS NO WARRANTY OR MECHANTABILITY, NO WARRANTY OF FITNESS FOR A PARTICULAR USE, AND NO OTHER WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, REGARDING THE DATABASE INFORMATION. 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YOU AGREE THAT THE LIABILITY OF "Developer", THE SOFTWARE ORIGINATORS, THE INFORMATION SUPPLIERS AND THE INFORMATION TRANSMITTERS, ARISING OUT OF ANY KIND OF LEGAL CLAIM (WHETHER IN CONTRACT, TORT OR OTHERWISE) IN ANY WAY CONNECTED WITH SMARTBROKER, WILL NOT EXCEED THE AMOUNT YOU ORIGINALLY PAID FOR THE SOFTWARE. Some states do not allow limitations on how long an implied warranty lasts, or the exclusion or limitation of incidental or consequential damages, so the above limitations or exclusions may not apply to you. This warranty gives you specific legal rights, and you may also have other rights which vary from state to state. No Advice By accepting this Agreement you acknowledge that the Software is intended only to be a computation aid and that neither it nor the Database Information accessible through its use is intended to supply investment, tax or legal advice. 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The agreement does not include any other prior or contemporaneous promises, representations or descriptions regarding the Software, Diskette, Documentation, and/or Database Information, even if they are contained in materials provided by "Developer". ON-LINE SERVICES AGREEMENT IMPORTANT: READ THIS AGREEMENT BEFORE USING ANY OF THE ON-LINE SERVICES, WHICH INCLUDE INFORMATION ACCESS (hereafter referred to collectively as the "Service"). YOUR USE OF THE SERVICE, OR SIGNED ACKNOWLEDGEMENT, WILL INDICATE YOUR ACCEPTANCE OF ALL OF THE FOLLOWING TERMS: If this Agreement is unacceptable to you, do not use the Service. 1. Information provided through the Service via SmartBroker software (the "Information") is independently obtained by Dow Jones & Co., Inc., various securities markets, such as stock exchanges, and their affiliates, and others (collectively, "Information Providers") through sources believed to be reliable. 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IN NO EVENT WILL "Developer", THE INFORMATION PROVIDERS OR THE INFORMATION TRANSMITTERS BE LIABLE TO YOU OR ANYONE ELSE FOR ANY CONSEQUENTIAL, INCIDENTAL, SPECIAL OR INDIRECT DAMAGES (INCLUDING BUT NOT LIMITED TO LOST PROFITS, TRADING LOSSES, AND DAMAGES THAT RESULT FROM LOSS OF THE USE OF THE SERVICE, INCONVENIENCE OR DELAY), EVEN IF "Developer", THE INFORMATION PROVIDERS OR THE INFORMATION TRANSMITTERS HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR LOSSES. YOU AGREE THAT THE LIABILITY OF "Developer", THE INFORMATION PROVIDERS AND THE INFORMATION TRANSMITTERS, ARISING OUT OF ANY KIND OF LEGAL CLAIM (WHETHER IN CONTRACT, TORT OR OTHERWISE) IN ANY WAY CONNECTED WITH THE SERVICE OR THE INFORMATION, WILL NOT EXCEED THE AMOUNT YOU ORIGINALLY PAID FOR THE SmartBroker SOFTWARE. Neither "Developer", the Information Providers nor the Information Transmitters shall be liable for any loss resulting from a cause over which such entity does not have direct control, including but not limited to failure of electronic or mechanical equipment or communication lines, telephone or other interconnect problems, unauthorized access, theft, operated errors, severe weather, earthquakes, and strikes or other labor problems. 3. The Information is the property of the Information Providers or others and is protected by copyright. It is for your personal, non-commercial use only. You agree not to reproduce, retransmit, disseminate, sell, distribute, publish, broadcast, circulate or commercially exploit the Information in any manner without the express written consent of "Developer" and the relevant Information Provider(s); nor to use the Information for any unlawful purpose. You agree to comply with reasonable written requests by "Developer" to protect the Information Providers' and "Developer"'s respective contractual, statutory and common law rights in the Information and the Service. 4. You acknowledge that neither the Service nor any of the Information is intended to supply investment, tax, or legal advice. You acknowledge that if you need such advice you should consult with professional advisors, and that you will not use or rely on the Service or Information to supply or substitute for any advice. You acknowledge that all orders are at your sole risk, and that securities quotations provided through the Service may be subject to time delay. 5. You agree immediately to notify "Developer" if you become aware of any of the following: A. Any loss or theft of your access number(s), and/or password(s), or B. Any unauthorized use of any of your access number(s), password(s), or of the Service of any Information; or C. Any failure by you to receive a message that an order initiated by you through the Service has been received and/or executed through the Service. 6. You will be responsible for the confidentiality and use of your access number(s), password(s). 7. You agree to pay all costs (including attorneys' fees), if any, incurred by "Developer" in collecting overdue fees from you. You also agree to pay all federal, state and local taxes applicable to your use or receipt of the Service. 8. "Developer" will not be responsible for any delay or failure to provide the Service. 9. You agree to indemnity and hold "Developer" harmless from and against any and all claims, losses, liability, costs and expenses (including but not limited to attorneys' fees) arising form you violation of this Agreement or any third party's rights, including but not limited to copyright, proprietary and privacy rights. This indemnification and hold harmless obligation will survive the termination of this Agreement. 10. You acknowledge that, in providing you with the Service, "Developer" has relied upon your agreement to be bound by the terms of this Agreement and the User License Agreement accompanying the SmartBroker software binder. You acknowledge that you have read, understood and agreed to be bound by the terms of the User License Agreement, and hereby reaffirm your acceptance of those terms. You further acknowledge that this Agreement and the User License Agreement and all other present or future written agreements between you and "Developer" constitute the complete statement of the agreement between you and "Developer" and that the agreement does not include any other prior or contemporaneous promises, representations or descriptions regarding service, the Information, or the SmartBroker software, even if they are contained in materials provided by "Developer". This Agreement may be modified only in writing; if "Developer" sends you written notice of a modification, your use of the Service after receiving such notice will indicate your acceptance of the modification If any provision of this Agreement is invalid or unenforceable under applicable law, it is, to that extent, deemed omitted and the remaining provisions will continue in full force and effect. This Agreement and performance hereunder will be governed by and construed in accordance with the laws of the State of Michigan, as applied to agreements entered into and completely performed in Michigan.