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MARCH QUICKIES - LET THE GAMES BEGIN!

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MARCH QUICKIES -- LET THE GAMES BEGIN!

Great News For Quickie Lovers!
It's great news, but I'm going to be a big tease and make you wait until the Sunday column to let you know what's going on. In the meantime, let's look at some quickie possibilities for the March cycle.

We have about a week left to expiration. All of the plays described are European style options. Trading on these options will cease at next Thursday's close. The actual settlement number will be the calculation of next Friday morning's opening price.

Remember that quickies can be tricky. They need more attention than our month long positions. Also, the figures on the plays below are based on Thursday's closing prices. If the market were to open flat tomorrow, these prices would be pretty accurate. However, after the close, Intel came out with some good news by announcing increasing guidance and margins. Once upon a time, good news from Intel could really move the market. It may still.

So, don't blindly rush into these trades. Be patient. You may want to avoid trading during "amateur hour." Let the market settle down a bit. Then evaluate. If things move substantially higher, you may want to adjust the strikes to accommodate the difference. If you are unsure of what to do, don't do anything! This is where we separate the sheep from the traders. Hopefully, you are using this site, and our CPTI trades, to learn -- to educate yourself. Unfortunately, some folks just use my column as a tout sheet -- like you get at the racetrack. That's a shame.

Traders (especially those who attend my seminar) strive to develop their trading and investigative skills to the point where it becomes second nature -- simply part of the position selection process. Ultimately, these traders will be able to pick trades better than I do. I see it happening all the time in the emails I receive. Then, when I'm gone, their cash won't stop flowing. Don't worry, I'm not going anywhere, but in life, nothing is forever. If you can accept that, then you will be better able to prepare yourself for the future.

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March Quickie #1 - SPX Iron Condor - 1209.25
Sell 10 SPX March 1190 puts
Buy 10 SPX March 1180 puts
Credit of about $.70 ($700)

Sell 10 SPX March 1230 calls
Buy 10 SPX March 1240 calls
Credit of about $.60 ($600)

Total net credit and profit potential of $1.30 ($1,300). Maximum profit range of 1190 to 1230 for five trading days. Maintenance is $10,000.

March Quickie #2 - MSH Iron Condor - 476.46
Sell 10 MSH March 460 puts
Buy 10 MSH March 450 puts
Credit of about $.60 ($600)

Sell 10 MSH March 490 calls
Buy 10 MSH March 500 calls
Credit of about $.50 ($500)

Total net credit and profit potential of $1.10 ($1,100). Maximum profit range of 460 to 490 for five trading days. Maintenance is $10,000.

March Quickie #3 - RUT Iron Condor - 626.94
Sell 10 RUT March 610 puts
Buy 10 RUT March 600 puts
Credit of about $.55 ($550)

Sell 10 RUT March 640 calls
Buy 10 RUT March 650 calls
Credit of about $.90 ($900)

Total net credit and profit potential of $1.45 ($1,450). Maximum profit range of 610 to 640 for five trading days. Maintenance is $10,000.

If you want to increase the potential profits for the above positions, you can move out the long puts and calls. If you pay less for the long calls, you can increase your potential profits because you will retain more of the premium you collected for the short puts and calls. You will have to have an account size that will accommodate larger spreads. Plus, you will have to be diligent about watching the positions, because your exposure will likely double.

Good luck and be very careful. Always adjust your trades to your account size.

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What Comes First, The Strangle Or The Scalp?

Well, when the Indians used to do it, they used to go straight for the scalp and the strangle part would pretty much take care of itself. At least that was the Sitting Bull theory was and he did all right for himself at the Little Big Horn.

Those of you who have been following the postings this week know that, today, we put another $250 in our pockets in our QQQ ITM Strangle trade. We sold 10 of the March $37 puts. Earlier this week, we bought back the 10 March $36.625 puts for a dime and, on Thursday, sold the March $37 puts for $.35 ($350). Going into expiration week, our short positions are now the $37 puts and $38 calls. We now have a cash total of $1,600 ($1,100 + $250 + $250). A good start.

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COUNTDOWN TO PROFITS! Only 9 Days Left To Jacksonville Seminar! (There are only a few spots left)

LEARN TO ACHIEVE SUCCESS WITHOUT STRESS WITH CPTI WEALTH-BUILDING TECHNIQUES

Do you have a job and can't monitor your trades all day long? These "hands-off" trading strategies are for you.

Do you want to learn how to consistently pocket profits that are out there for the taking?

Do you want to define and minimize your risks?
Do you know how to negotiate with market makers?
Do you know how to read between the lines of an option chain?
Do you know how to capture premium where there seems to be none?

OF COURSE YOU DO!

We've been profitable 26 out of the last 27 months and I can help you learn the secrets. Actually, they're really not secrets. But, until you learn what to look for, not knowing the methods is likely costing you money.

Those are just a few of the valuable skills I teach and can help you develop when you attend my seminar. If you're a serious trader, why limit yourself?

Learn how to position yourself to take advantage of those silly directional traders who lose their money betting on whims or the recommendations of others? It's relatively easy pickins -- if you have what it takes to harvest the crop. It's not brain surgery -- IF you know what to do.

Options are marvelous tools -- but you have to know how to use them. There's more to consistently making money than a coin flip and a mouse click. For less than the profit on one Iron Condor trade, you can learn how to put the percentages in your favor. It's knowledge that will last you a lifetime. Join me at one of my CPTI seminars.

The dates and locations are:
March 19/20 - Jacksonville, FL
April 16/17 - Chicago, IL
May 14/15 - Irvine, CA

Send me an email at mparnos@optioninvestor.com and I'll forward you all the details. Don't be left out! The spots are filling up fast. It'll be a weekend you'll never forget! Serious option traders only! Directional trader converts welcome!

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MARCH CPTI POSITIONS
March CPTI Position #1 -- MSH Iron Condor - 476.46

The Morgan Stanley High Tech Index has some pretty well defined support and resistance levels. The market seems to have settled back into a trading range. Let's hope it behaves.

We sold 10 March MSH 430 puts and bought 10 March MSH 420 puts for a credit of about: $.90 ($900). Then we sold 10 March MSH 510 calls and bought 10 March MSH 520 calls for a credit of about $.35 ($350). Our total approximate credit and potential gain of $1.25 ($1,250). Maximum profit range is 430 to 510. The maintenance is $10,000. The actual exposure is $8,750 ($10,000 less the $1,250 premium received).

March CPTI Position #2 -- SPX Iron Condor - 1209.25
We sold 15 March SPX 1120 puts and bought 15 March SPX 1110 puts for a credit of about: $.50 ($750). Then, we sold 15 March SPX 1240 calls and bought 15 March SPX 1250 calls for a credit of about: $.70 ($1,050). Our total approximate credit and potential gain is $1.20 ($1,200). We've established a maximum profit range of 1120 to 1240. The maintenance is $15,000. The actual exposure is $13,200 ($15,000 less the $1,800 premium received).

March CPTI Position #3 - MSH Bull Put Spread - 476.46
It also gave us the opportunity to add to our MSH bull put spread position. We already put on 15 contracts of the 430/420 bull put spread. The support level is still valid -- plus, there isn't much premium to be found elsewhere. We sold 10 March MSH 430 puts and bought 10 March MSH 420 puts for a credit of $.50 ($500).

This is the bull put spread of what we hope will be an Iron Condor position. We'll have to wait for MSH to pop back up before there is any premium in the 510/520 bear call spread

March CPTI Position #4 - SOX Iron Condor - 440.46
The SOX is an old friend we haven't visited for awhile. There are some pretty well defined support and resistance levels and there is still a little premium left for us.

We sold 10 March SOX 380 puts and bought 10 March SOX 370 puts for a credit of about: $.55 ($550). Then we sold 10 March SOX 470 calls and bought 10 March SOX 480 calls for a credit of about: $70 ($700). Our total net credit and potential profit is about $1.25 ($1,250). Our maximum profit range is 380 to 470. The maintenance is $10,000.

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ONGOING STRATEGIES
ZERO-PLUS Strategy - February Iron Condor Position - SPX - 1209.25
Profit: $2,100.

In my Feb. 8, 2004 column, I outlined a strategy based on an initial investment of $100,000. $74,000 was spent on zero coupon bonds maturing in about seven years at a value of $100,000. The principal $100,000 investment is guaranteed. We're trading the remaining $26,000 to generate a "risk free" return on the original investment.

This year, we're going to use the entire $26,000 of extra cash as maintenance for some Iron Condors. That should enable us to generate substantially more profit on this "no risk" strategy.

New March Zero Plus Position:
March SPX Iron Condor - 20 contracts of 1150/1140 bull put spread @ $.45 ($900) & 20 contracts of 1240/1250 bear call spread @ $.45 ($900). Total = $.90 ($1,800). Maximum profit range is 1150 to 1240. Maintenance is $20,000.

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QQQ ITM Strangle - $37.52
We own 10 January 2007 $42 puts and 10 January 2007 $32 calls at a total cost of $14,600. Only $4,600 is at risk as the other $10,000 of intrinsic value will always be there. We then sold the March $36 puts and $38 calls, taking in a total of $1.10 ($1,100). If all goes well, the QQQQs will close somewhere between $36 and $38. We will then sell the April near term options, etc. etc. The objective is to sell premium every month for the next 22 months. When all is said and done, we should be able to show a very nice profit.

On Wednesday we closed the March $36 put for $.10. and on Thursday (today) we sold the March $36.625 put for $.35 -- taking in an additional $250 on our 10 contract position.

More premium for the good guys (us!). See explanation in article above.

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CPTI APRIL POSITIONS
April CPTI Position #1
-- MSH Iron Condor - 476.46
With MSH trading at about 471, we sold 15 MSH 510 April calls and bought 15 MSH 520 April calls for a credit of about $.75. Then we sold 15 MSH 420 April puts and bought 15 MSH 410 April puts for a credit of about $.45. Our total net credit is about $1.20 with a potential profit of $1,800.

Note that I took advantage of the time factor (and a little extra premium) to lower the bull put spread to 420/410 rather than the 430/420 that we have on as a March position. Does that balance out the additional time exposure? Not entirely, but it is a little safer. Maximum profit range is 420 to 510 and the maintenance is $15,000.

April CPTI Position #2 - OSX Calendar Spread - $136.75
We bought 10 OSX September $150 calls @ $8.30 and sold 10 OSX April $150 calls @ $2.35. Our out of pocket cost is about $5.95 ($5,950).

Our price target for the next six weeks is about $150. If we're right, we should make a nice chunk of change. Even if OSX goes nowhere, we will not have risked a great deal. The $2.25 we took in from the short April call will erode away and will help to offset any premium erosion from our long Sept. $150 calls.

We may hold this position only until April expiration, or we may roll it out further. It depends on how it all unfolds. It may evolve into an ongoing position. Why did I select the Sept. $150 calls? Because September is the furthest month out that OSX options are available.

April CPTI Position #3 - CME Iron Condor - 197.90
It's the Chicago Mercantile Exchange -- you know, the exchange where people trade futures on grains, gasoline and pork bellies.

We sold 10 CME April 230 calls and bought 10 CME April 240 calls for a credit of about $.60 ($600). Then we sold 10 CME April 165 puts and bought 10 CME April 155 puts for a credit of about $.60 ($600). Our total net credit and profit potential is about $1.20 ($1,200). Our maximum profit range is 165 to 230. Maintenance is $10,000.

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HAPPY TRADING!
Remember the CPTI credo: May our remote batteries and self-discipline last forever, but mierde happens. Be prepared! In trading, as in life, it's not the cards we're dealt. It's how we play them.

Mike Parnos, Your Options Therapist and CPTI Master Strategist

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Couch Potato Trading Institute Disclaimer
All results reported in this section are hypothetical. While the numbers represented here may have been achieved or beaten by our readers, we make no representation that any individual investor achieved these exact results. The tracking for the plays listed in this section uses closing prices for the day the newsletter is published and it is not meant to imply that any reader actually received those prices or participated in these recommendations (even though many do). The portfolio represented here is hypothetical and for investment education purposes only. It is only an illustration of what type of gains a knowledgeable trader might receive utilizing these strategies. If you don't get close to these results, it sure as hell isn't the fault of the strategies.

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