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NEW AUG. CPTI POSITION

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NEW CPTI POSITION FOR AUGUSTGood morning CPTIers,

With the three day weekend ahead of us, there's one thing we can be certain of -- premium will disappear -- from both the July and August options. So, let's look into putting on another August position -- while there's still some premium there. I know, we'll have to wait for seven weeks. But the market seems to have stalled. It probably won't stay stalled for seven weeks, but therein lies the risk. If you are uncomfortable with the trade, simply don't do it. Just because I post them doesn't mean I have a direct line to the option Gods. Your comfort level is something only you know. Respect it.

So, let's check out the SOX. It's in the middle of a range and I think we can put on positions below support and above resistance.

Sell 12 SOX August 380 puts
Buy 12 SOX August 370 puts
Credit of about $.60 ($720)

Sell 12 SOX August 465 calls
Buy 12 SOX August 475 calls
Credit of about $.60 ($720)

Total net credit and profit potential of about $1.20 ($1,440). Our maximum profit range is 380 to 465. Our maintenance is $12,000 -- if you have the right broker.

Remember to adjust the number of contracts to your account size. You can try to enter the position as one trade, or you can try to put on the bull put spread and the bear call spreads separately.

Good luck, be careful and trade smart -- and contact me to sign up for the Philadelphia seminar -- but only if you are a SERIOUS option trader.

Mike

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