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TROLLING FOR JUNE POSITIONS

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Between high oil prices, the Fed threat of 50 basis point increases, earnings announcements and a bevy of other nonsense, the market is confused. Good!! That's the way we at the Couch Potato Trading Institute like it.

On Friday, before the market, the futures were indicating a big move based on the good jobs report. I sent a post advising to throw out an order for our QQQQ ongoing position to take advantage of an upward spike. It was a big move that never materialized. Since there was no move, the orders expired. You might want to put another order out there to sell the May $37 calls for $.20 or $.25 -- just in case there is a delayed reaction to the jobs number. Stranger things have happened.

Well, with two weeks to go to May expiration, our positions look under control -- at least for the moment. Now may be the time to use some of that extra maintenance to establish a new position or two for June. Let's see what's out there.

CPTI June Position #1 - CME Iron Condor - $198.38
CME has been good to us over the last few months. We'll give it another chance to be good to us again.

Sell 15 June CME $170 puts
Buy 15 June CME $160 puts
Credit of about $.60 ($900)

Sell 15 June CME $230 calls
Buy 15 June CME $240 calls
Credit of about $.50 ($750)

Net credit and profit potential of about $1.10 ($1,650). Maximum profit range of $170 to $230. Maintenance is $15,000.

CPTI June Position #2 - SPX Iron Condor - 1171.35
Our favorite index just keeps on giving. We'll keep on taking.

Sell 15 June SPX 1110 puts
Buy 15 June SPX 1100 puts
Credit of about $.70 ($1,050)

Sell 15 June SPX 1225 calls
Buy 15 June SPX 1235 calls
Credit of about $.70 ($1,050)

Net credit and profit potential of about $140 ($2,100). Maximum profit range of 1110 to 1225. Maintenance is $15,000.

If the market pops up, you might look at the possibility of raising your SPX bear call spread to 1230/1240. Just because I post trades with certain strike prices doesn't mean that you can't use some initiative to adjust the strikes. If there is a big market move or if you want to be safer, go for it! The posted trades are guidance. They're not etched in stone.

Keep in mind that these numbers are based on Friday's closing prices. There may be a little erosion over the weekend, but you should be able to get pretty close to the posted premiums. Also, recognize that we are putting these positions on two weeks prior to May expiration. We're going to sit with these positions for about six weeks. We are accepting the additional time exposure in exchange for a reasonable premium. If you are adverse to the additional time exposure, you may want to wait.

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Exercise for Couch Potatoes
Suggested for seniors, to build muscle strength in the arms and shoulders. It seems so easy, so I thought I'd pass it on to some of my younger friends. The article suggested doing it three days a week.

Begin by standing on a comfortable surface, where you have plenty of room at each side.

With a 5-lb. potato sack in each hand, extend your arms straight out from your sides, and hold them there as long as you can. Try to reacha full minute, then relax.

Each day, you'll find that you can hold this position for just a bit longer.

After a couple of weeks, move up to 10-lb. potato sacks.

Then 50-lb. potato sacks, and eventually try to get to where you can lift a 100-lb. potato sack in each hand and hold your arms straight for more than a full minute.

After you feel confident at that level, put a potato in each of the sacks; but be careful.

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CPTI IRVINE, CA SEMINAR IS SOLD OUT!! (See Below)
With only one week remaining to the seminar, you are welcome to put your name on a waiting list in case there is a cancellation.

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MAY CPTI POSITIONS
May CPTI Position #1 - SPX Iron Condor - 1171.35
We sold 15 SPX May 1100 puts and bought 15 SPX May 1090 puts for a credit of $.60. Then we sold 15 SPX May 1235 calls and bought 15 SPX May 1245 calls for a credit of $.75. Our total net credit is $1.35 ($2,025). We have a maximum profit range of 1100 to 1235. The bigger the better!! Maintenance is $15,000.

May CPTI Position #2 - CME Iron Condor - 198.382
We sold 15 CME May 155 puts and bought 15 CME May 145 puts for a credit of $.65. Then we sold 15 CME May 230 calls and bought 15 CME May 240 calls for a credit of $.40. Our total net credit and profit potential is $1.05 ($1,575). Our maximum profit range is 155 to 230. The maintenance is $15,000.

May CPTI Position #3 - MID Iron Condor - Closed For $2,280 Loss.
We sold 12 May MID 620 puts and bought 12 May MID 610 puts for a credit of $.65 ($780). Then we sold 12 May MID 700 calls and bought 12 May MID 710 calls for a credit of about $.45 ($540). Our total net credit and profit potential of $1.10 ($1,320). Closed for $2,280 loss.

May CPTI Position #4 - SPX Iron Condor - 1171.35
We sold 20 SPX May 1210 calls and bought 20 SPX May 1220 calls for a credit of about $.45 ($900). Then we sold 20 SPX May 1105 puts and bought 20 SPX May 1095 puts for a credit of about $.60 ($1,200). Our total net credit and profit potential is $1.05 ($2,100). Maximum profit range is 1105 to 1210. Maintenance: $20,000.

June CPTI Position #1 - GOOG Iron Condor - $226.98 (Formerly May Position)
We sold 12 GOOG May 160 puts and bought 12 GOOG May 150 puts. We also sold 12 GOOG May 220 calls and bought 12 GOOG May 230 calls. Our total net credit and profit potential is $1.40 ($1,680). Our maximum profit range is $160 to $220. Maintenance is $12,000.

We bought back the May bear call spread and rolled out to the June $220/$230 bear call spread. We also bought back the May $160 put for a nickel. Our new credit and profit potential is now $2,260 (see Wednesday's post for details).

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ONGOING STRATEGIES
ZERO-PLUS Strategy - May Iron Condor Position - SPX - 1171.35
Profit: $2,000.
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.

In April, we placed a SOX 450/460 and 380/370 Iron with a total net credit was $.85 ($1,700). It expired worthless and our profit was the entire $1,700. Our new cash position is: $27,800 + $1,700 = $29,500.

New May Zero Plus Position: SPX Iron Condor - 1156.85Sold 20 SPX May 1210 calls and bought 20 SPX May 1220 calls for a credit of $.45 ($900). Then sold 20 SPX May 1090 puts and bought 20 SPX May 1080 puts for $.55 ($1,100). Our total net credit is $1.00 ($2,000).

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QQQ ITM Strangle - $35.87
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.

We rolled out our short April options to the May $36 puts and $37 calls and took in another $950. Add that to our previous cash total of $2,100 and we now have generated a total of $3,050.

We took advantage of the downdraft of the market to buy back our $37 calls for $.05. The order was there as a GTC (good till cancel) order since the original May rollout. The market spiked down and it got filled. Now, we will look for an opportunity, on a bounce, to sell another May option and take in an extra bit of premium.

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IRVINE SEMINAR SOLD OUT!!
With only one week remaining to the seminar, you are welcome to put your name on a waiting list in case there is a cancellation. If you're interested, contact me at mparnos@optioninvestor.com.

NEW SUMMER SEMINAR DATE: JULY 16 & 17 -- PHILADELPHIA, PA

WE'VE HAD 28 OUT OF 29 PROFITABLE MONTHS -- WITH NO END IN SIGHT.

WANT TO ACHIEVE SUCCESS WITHOUT STRESS WITH CPTI WEALTH-BUILDING TECHNIQUES? OF COURSE YOU DO!!

Spots are still left for my July Philadelphia CPTI seminar. They probably won't last long, so be proactive! That means GOYA. Contact me at mparnos@optioninvestor.com and I'll reserve a spot for you. He who hesitates may be SOL.

The dates and locations are:
May 14/15 - Irvine, CA -- SOLD OUT!!
July 16/17 - Philadelphia, PA

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!

You should really try and make one of these seminars, if you can. With what you learn, you'll see a substantial increase in your trading results. If you've already signed up, I'll see you there. If you haven't signed up, what are you waiting for?

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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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