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27 OUT OF 28 -- HOW SWEET IT IS!

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27 OUT OF 28 - HOW SWEET IT IS!Like shooting fish in the barrel (my favorite sport). Well, let's not get too carried away. it's not quite that easy, as most of you CPTI students know. But, we were able to record our 27th profitable month out of 28.

Our short strike prices were never in any real danger as the market remained choppy - in a range. How long will it stay in the range? Well, stay tuned to this station. We're going to try and milk it as long as we can.

Premium is still real tough to find. Today is the second day of my Jacksonville seminar. We're going to scour the option chain and try and find some plays for April. I emphasize the word "try."

Remember, when premium is scarce, you have to avoid the temptation to compromise safety when selecting strike prices. We've had to put on our April positions well in advance of expiration just to get "reasonable" premium. We've increased our time exposure by a few weeks and it looks like that's how this game is going to have to be played - as long as the volatility remains low.

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TRACKING OF OUR PROFITS
Below is a summary of the March CPTI positions. Through five months in tracking year number three, we're now $12,240 to the positive. We're going to continue to be conservative and to trade smart. The profits will follow.

March Trade Summary
MSH - Iron Condor - Profit: $1,250
SPX - Iron Condor - Profit: $1,800
MSH - Bull Put Spread - Profit: $500
SOX - Iron Condor - Profit: $1,250
TOTAL
MARCH RESULTS: Profit: $4,800

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COUNTDOWN TO PROFITS!

I'm proud to announce the CHICAGO Mike Parnos CPTI seminar is now SOLD OUT! Twenty-five people have signed up. If you are still interested in joining us in Chicago, you can let me know and I'll put you on a waiting list in case there is a cancellation.

In the meantime, there are still spots left at the Irvine, CA seminar. They probably won't last too long, so be proactive! Contact me and I'll reserve a spot for you. He who hesitates may be SOL.

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 27 out of the last 28 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:
April 16/17 - Chicago, IL - SOLD OUT!!!
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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QUICKIE REPORT - THREE OUT OF THREE
All three of our quickie positions were 100% profitable again this month, but not for all who participated. The SPX fell below the 1190 level and some quickie players got out of their position. Some used sound money management skills when they exited the trade. However, there are always those who don't pull the trigger to get out and who hold on for dear life. This time around, they were rewarded as SPX settled at 1190.70. The profit was about $1,300 - for those who hung in there. This is a mixed message. This kind of occurrence encourages traders to hang on longer than they should - puffing on that hopium drug - "hoping" the index will rebound.

Even though the RUT is premium retentive, some folks were able to put on the quickie and made out just fine. Instead of the posted profit of about $1,450, I understand some traders were able to get closer to $1,100.

The MSH quickie also closed comfortably above the 460 level providing a profit of about $1,100. Fortunately, the results were based on the opening prices, because MSH drifted below 460 later in the day.

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SUMMARY OF MARCH CPTI POSITIONS
March CPTI Position #1 -- MSH Iron Condor - 458.97
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 credit and potential gain is $1.25 ($1,250). Profit: $1,250.

March CPTI Position #2 -- SPX Iron Condor - 1189.65
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 ($1,800). Profit: $1,800.

March CPTI Position #3 - MSH Bull Put Spread - 458.97
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). Profit: $500.

March CPTI Position #4 - SOX Iron Condor - 414.13
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). Profit: $1,250.

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ONGOING STRATEGIES
ZERO-PLUS Strategy - February Iron Condor Position - SPX - 1189.65
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.

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 - $36.51
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.

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 accumulated a cash total of $1,600 ($1,100 + $250 + $250). A good start.

We rolled out our short positions to April. We bought back the March $37 puts and sold the April $36 puts for no credit or debit. It was an even exchange. Then we sold the April $37 calls for $.60 ($600). We had purchased back the March $38 puts last week for $.05. Our net credit for April (at least to begin with) is $550. Add that to our previous cash total of $1,600 and we now have generated a total of $2,100. Now, if the market cooperates . . .

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CPTI APRIL POSITIONS
April CPTI Position #1 -- MSH Iron Condor - 458.97
With MSH trading at about 471, we sold 15 MSH 510 April calls and bought 15 MSH 520 April calls for a credit of $.75. Then we sold 15 MSH 420 April puts and bought 15 MSH 410 April puts for a credit of $.45. Our total net credit is $1.20 with a potential profit of $1,800.

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 - $138.45
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 - 193.39
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.

April CPTI Position #4 - SPX "Sure Thing" Credit Spread - 1189.65
The "sure thing" credit spread is used primarily with a trending market. The market appears to have changed direction and has no real reason to go up. With rising oil prices and other economic problems, it looks like the market may take a rest and may drift lower for awhile.

We sold 2 SPX April 1215 Calls and bought 2 SPX April 1240 Calls for a credit of about $7.00 ($1,400).

This strategy is only for traders who have a very large account and have excess maintenance dollars handy. Our initial maintenance is only $5,000 (25 points x 2 contracts).

April CPTI Position #5 - SPX Iron Condor - 1189.65
We sold 15 SPX April 1125 puts and bought 15 SPX April 1115 puts for a credit of about $.50 ($750). Tlhen we sold 15 SPX April 1250 calls and bought 15 SPX April 1260 calls for a credit of about $.50 ($750). Our total net credit is $1.00 ($1,500). Max profit range: 1125 to 1250. Maintenance: $15,000.

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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, guess what? It isn't the fault of the strategies.

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