Leverage Alert: Taser

ALL LEVERAGE SERVICES

WEDNESDAY, DECEMBER 29, 2004
NEW RECOMMENDATION!

PLACE A DAY-LIMIT ORDER TO BUY (TO OPEN) THE TASER INTERNATIONAL FEBRUARY
27.50 CALL (QURBY) AT A MAXIMUM ENTRY PRICE OF 4.50 OR LESS.

*** IF YOU ARE UNABLE TO ENTER THIS POSITION BEFORE THE CLOSE TODAY, WE
RECOMMEND THAT YOU REPEAT THIS PROCEDURE THROUGH THE NEXT TRADING DAY. DO
NOT ATTEMPT TO GET INTO THIS TRADE AFTER THE NEXT TRADING DAY’S CLOSE. ***

THIS OPTION IS CURRENTLY BID AT 4.10, OFFERED AT 4.30.

TASR IS CURRENTLY TRADING AT 29.69.

NEVER PAY MORE THAN THE MAXIMUM ENTRY PRICE FOR THIS OR ANY OTHER
RECOMMENDATION. DO NOT INVEST MORE THAN 10% OF YOUR AVAILABLE CASH
ALLOCATED TO THIS PROGRAM IN ANY ONE TRADE.

IF YOU ARE A SUBSCRIBER OF MULTIPLE LEVERAGE SERVICES, ENTER THIS TRADE
ACCORDING TO THE NUMBER OF SERVICES YOU OWN. FOR EXAMPLE, IF YOU OWN TWO
LEVERAGE SERVICES, BUY TWO TIMES AS MANY CONTRACTS AS YOU NORMALLY WOULD
FOR A SINGLE TRADE.

YOU WILL NOT RECEIVE FURTHER COMMUNICATION CONCERNING THIS TRADE, INCLUDING
CLOSEOUT INSTRUCTIONS, IF YOUR SUBSCRIPTION IS NOT ACTIVE AT THE TIME WE
ISSUE FOLLOW-UP INSTRUCTIONS.

LEVERAGE SERVICES
WEDNESDAY, DECEMBER 29, 2004
COMMENTARY

TASER INTERNATIONAL (TASR) TRADE DRIVERS:

* Pessimism continues to mount toward TASR. The equity's Schaeffer's
put/call open interest ratio of 0.86 is resting near a six-month high.

* Furthermore, roughly 30 million shares have been sold short, making TASR
the 15th most shorted stock on the Nasdaq in number of shares. In
addition, approximately 60 percent of the equity's float have been sold
short. An unwinding of these bearish bets could fuel a substantial rally
in the shares.

* Wall Street continues to ignore the security, with only one analyst
following the firm. Any additional coverage could spur further gains for
the shares.

* The last three times the stock's 30-day historical volatility fell
sharply, the shares enjoyed a strong rally. In early April, TASR shot 51
percent higher and then gained 88 percent again in mid-June. In early
September, the stock advanced almost 50 percent following a drop in its
historical volatility.

* Technically speaking, the equity broke out above a bullish symmetrical
triangle formation on December 20, suggesting that higher prices are in
TASR's future.

* One concern is the more than 32,000 calls at the stock's January 30
strike. This accumulation of bullish bets is equal to about 23 percent of
the stock's last 20 day's average volume. This out-of-the-money call open
interest could provide some potential options-related resistance. However,
the equity's February 30 call is home to only 2,500 contracts at the
moment.

REVIEW OF RECOMMENDATION: Buy the TASER International February 27.50 call
(QURBY) at a maximum entry price of 4.50. We will closely monitor this
position and contact you immediately with updated instructions should our
expectations change.

You will not receive further communication concerning this trade, including
closeout instructions,
if your subscription is not active at the time we issue follow-up
instructions.
(Copyright 2004 Schaeffer's Investment Research Inc.