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29 OUT OF 30 -- MORE DEAD PRESIDENTS IN OUR POCKET

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29 OUT OF 30 PROFITABLE MONTHS -- MORE DEAD PRESIDENTS IN OUR POCKET

Fortunately, the "dead presidents" we're talking about are the green and spendable kind -- no graves have been desecrated for this column. Despite our first losing trade (MID) since the November mess, profits from our other Iron Condor positions kept us comfortably in positive territory to the tune of $3,420.

In hindsight, which is always 20/20, I should have paid attention to my DFWI approach with the MID position. It would have bounced off the lower support level and finished comfortably within the established range. Then we wouldn't be up the creek with the Google position. Oh well, it was the prudent thing to do at the time -- at least the closing of MID part was prudent.

KEEPING TRACK OF OUR PROFITS
Below is a summary of the May CPTI positions. Through seven months in tracking year number three, we're now $23,430 to the positive. We're going to continue to be conservative and to trade smart. The profits will follow.

RECAP OF MAY POSITIONS
SPX Iron Condor - Profit: $2,025
CME Iron Condor - Profit: $1,575
MID Iron Condor - Loss: $2,280
SPX Iron Condor - Profit: $2,100
TOTAL MAY PROFITS: $3,420

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NEW JUNE POSITIONS
I've been scouring the option chains for our favorite indexes and it has been difficult to find new positions that have a comfortable level of safety. We may have to put on one side of our Iron Condor positions and then wait for an opportunity to put on the other sides. Below are a few things I'm looking at. Remember, these are based on Friday's closing prices, so they will likely be different when they open on Monday.

The SPX
1. The 1140/1130 bull put spread for about $.60
2. If the market moves lower, I'll adjust the strike prices of the bull put spread to 1135/1125 for $.50-$.60 -- or even the 1130/1120 for roughly the same credit.
3. A possible "sure thing" credit spread. It appears the market has begun a trend higher. I'd like to get an 1175/1150 bull put spread, but may have to wait for a pullback to get the $7.00 of credit we need to initiate a position. As I am writing this, I might consider the 1180/1155 bull put "sure thing" spread. the only problem is that there is currently no 1155 strike price. Perhaps one will open up on Monday with the new June cycle.

The MID
1. The 620/610 bull put spread looks like it might yield us $.50. That's the same bull put spread we had last month -- the one we closed out for a loss. The fact that the market bounced up from the mid 620s reinforced the fact that it is a good support level. See, I don't hold grudges.

The RUT
1. The 570/560 bull put spread looks like it might yield about $.60 -- if we can get a little negotiation cooperation from the RUT market makers. They aren't known for their generosity, but if we catch them right after a liquid lunch, maybe . . .

The OEX
1. The 540/530 bull put spread has possibilities -- perhaps yielding $.40-$.45 on a pullback. If the pullback is sufficient, you could also look at the 535/525 bull put spread.

Remember, that one look at an option chain will only tell you the quotes for that moment. Ideally, you should have streaming option quotes, along with streaming numbers for the bid size and ask size. If you don't have streaming quotes, you should be regularly refreshing your real time option chain, because the numbers change moment by moment.

Once the position is on, we can go back to the couch and fondle our remote control. However, the initiating of new positions requires the "laying on of hands" -- which is now a religious, a sexual, and a trading expression. I like multi-tasking, don't you? Just put an expression out there and leave the rest to the imagination.

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SUMMARY OF MAY CPTI POSITIONS
May CPTI Position #1 - SPX Iron Condor - 1189.28
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 - 209.02
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 - 1189.28
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.

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ONGOING STRATEGIES
ZERO-PLUS Strategy

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 May, we placed an SPX Iron Condor with a total net credit was 2,000. It expired worthless. Our new cash position is: $29,500 + $2,000 (May Profit) = $31,500

June Zero Plus Position: Coming Soon (Probably Monday)

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QQQ ITM Strangle - $37.66
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 May options to June (see details above) and took in a net of $800. Our new total of income generated is $3,850 ($3,050 + $800). We are short the June $37 calls and $36 puts.

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JUNE CPTI POSITIONS
CPTI June Position #2 - SPX Iron Condor - 1189.28
Our favorite index just keeps on giving. We'll keep on taking.
We sold 15 June SPX 1110 puts and bought 15 June SPX 1100 puts for a credit of $.70 ($1,050). Then we sold 15 June SPX 1225 calls and bought 15 June SPX 1235 calls for a credit of about $.70 ($1,050). Our net credit and profit potential is $140 ($2,100). Maximum profit range of 1110 to 1225. Maintenance is $15,000.

CPTI June Position #1 - CME Iron Condor - $209.02
CME has been good to us over the last few months. We'll give it another chance to be good to us again.
We sold 15 June CME $170 puts and bought 15 June CME $160 puts for a credit of $.60 ($900). Then we sold 15 June CME $230 calls and bought 15 June CME $240 calls for a credit of about $.50 ($750). Our net credit and profit potential is $1.10 ($1,650). Maximum profit range of $170 to $230. Maintenance is $15,000.

CPTI June Position - GOOG Iron Condor - $241.61 (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.

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

WE'VE HAD 29 OUT OF 30 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:
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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