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ANOTHER "SAFE" POSITION

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For many people, the only really "safe" position is sitting upright in a chair with your legs crossed. However, at the CPTI we can't afford to do that -- and make money at the same time. So, a few days ago we assumed the "couch potato" position and put on our third October CPTI spread position - another SPX Iron Condor.

We sold 12 October SPX 1285 calls and bought 12 October SPX 1300 calls and received a credit of $.80 ($960). We had asked for $.75, but, our broker came back with an $.80 fill (bless his heart). Then, we sold 12 October SPX 1155 puts and bought 12 October SPX 1140 puts for a credit of $.65 ($780). Our total profit potential is $1,740. We have a maximum profit range of 1155 to 1285.

Originally, we were going to try for the 1140/1125 bull put spread, but, when the market opened (as so often happens), the premium was gone. So, we came up with a workable plan B (1155/1140) -- and we still have more than a 72-point cushion to the downside.

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Some "Quick" Profits For Those Who Dared
All three of our "quickie" trades were profitable this month - for a total of $3,350. We're still subject to the Friday morning open, but we have a comfortable cushion on all three positions. Remember, these are risky positions and are for the more seasoned CPTI traders. They worked out great this month, so the traders who took these positions were rewarded well for five trading days of exposure.

Also, in less than two months, the CBOE will be offering the short term SPX options we've been waiting for. They should be a real adventure.

Here is a synopsis of the results:
Quickie #1 - SPX Iron Condor - 1227.73
Sept. 1210/1200 bull put spread and 1250/1260 bear call spread. Profit of $1,200.

Quickie #2 - RUT Iron Condor - 665.42
Sept. 650/640 bull put spread and 690/700 bear call spread. Profit of $1,050

Quickie #3 - SOX Iron Condor - 473.26
Sept. 460/450 bull put spread and 495/505 bear call spread. Profit of $1,100.

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I Don't Know How It Happened, But . . . .
Does everybody get dozens of those scam emails from Nigeria, or is it just me? Somehow, they got one of my email addresses, and my mailbox has been overflowing ever since. If all the people in Nigeria died and left estates as is represented in those emails, Nigeria should be empty in a few weeks and the emails should stop -- but, I'm not holding my breath.

Now, the same people must be conducting lotteries in England -- because I've won 123 of them (and counting). I'm such a lucky guy. Can someone tell me what kind of idiot will buy into those schemes? There must be enough or they wouldn't continue to send those damn things out.

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Not a Couch Potato
Not long ago I met the waitress of my dreams.
About halfway through dinner I called the waitress over and said, "Ma'am, this potato is bad."
She nodded, picked up the potato and smacked it. Then she put it back on my plate and said, "Sir, if that potato causes any more trouble, you just let me know."

Quotes
"Do yourself a favor and master the art of money. Treat it as an honored guest in your life, one who will quickly flee if you do not treat her well, but one who will stay and enrich your life beyond measure if you treat her with care and respect." -- Philip E. Humbert

"It's good to have money and the things that money can buy, but it's good, too, to make sure you haven't lost the things that money can't buy." -- George Horace Lorimer

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SEPTEMBER POSITIONS
CPTI SEPTEMBER Position #1 -- SPX Iron Condor - 1227.73
On July 29 with the SPX trading at about 1240, we sold 12 SPX September 1175 puts and bought 12 SPX September 1160 puts for a credit of about $.80 ($960). We had about a 65 point cushion -- and various support levels above. We then sold 12 Sept. SPX 1265 calls and bought 12 Sept. SPX 1280 calls for a credit of $.85 ($1,020). Our total credit and profit potential is $1,980. Our maximum profit range is 1175 to 1265. The maintenance for the entire position is (if you have the right broker) $18,000.

CPTI SEPTEMBER Position #2 - RUT Iron Condor - 665.42
On August 3 with the RUT trading at about 685 we sold 12 RUT September 630 puts and bought 12 SPX September 620 puts for a credit of $.85 ($1,020). The cushion is about 55 points with support levels above the short strike price.

Then, on Monday, we sold 12 Sept. RUT 690 calls and bought 12 Sept. RUT 700 calls for a credit of about $.85 ($1,020). Our total credit and profit potential is $2,040. Our maximum profit range is 630 to 690. The maintenance for the entire position (if you have the right broker) is $12,000.

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CPTI OCTOBER POSITIONS

CPTI October Position #1 - SPX Iron Condor - 1227.73
We sold 15 SPX October 1280 calls and bought 15 SPX October 1290 calls for a credit of about $.60 ($900). On Friday we sold 15 SPX October 1160 puts and bought 15 SPX October 1150 puts for a credit of about $.60 ($900). We now have a complete Iron Condor with a trading range of 1160 to 1280. Our total potential profit is $1,800. There should be no additional maintenance required above the $15,000 that's being held for our bear call spread (IF you have the right broker).

CPTI October Position #2 - OEX Iron Condor - 568.29
With the OEX at about 559, we sold 15 OEX October 590 calls and bought 15 OEX October 600 calls for a credit of about $.55 ($825). Then we sold 15 OEX October 525 puts and bought 15 OEX October 515 puts for a credit of about $.75 ($1,125). Our credit and potential profit is $1,950. Maximum profit range is 525 to 590. Maintenance is $15,000.

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ONGOING STRATEGIES
ZERO-PLUS Strategy - September SPX Iron Condor - 1227.73
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.

Our new cash position is: $31,500 + $1,500 (July Profit) = $33,000

Earlier this week we sold 20 SPX 1165 puts and bought 20 1150 puts for a credit of $.65 ($1,300). We also put on the bear call spread for our September Iron Condor. We sold 20 Sept. 1265 calls and bought 20 Sept. 1280 calls for a credit of $.85 ($1,700). No additional maintenance was required. Our maximum profit range is now 1165 to 1265.

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QQQ ITM Strangle - $39.16
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).

Normally, if I had been able to access the internet, our rollout might have been a little different, but probably not much. But, looking at the closing quotes of Friday, you should have bought back the August $37 calls for about $1.90 and rolled them to the September $37 calls for about $2.00 (a credit of $.10 or $100). The August $37 puts would have expired worthless and you can simply sell the $37 September puts for another $.10 or $100).

So, for the September expiration cycle, we're only going to take in about $200 while we patiently wait for the QQQQs to come back down. Remember, this strategy requires a belief that the QQQQs will regress to the "mean" area of about $36 to $38. The success of this strategy is an average of premium taken in over an long period of time.

Based on these figures, the new total of generated premium is about $5,100 ($4,900 plus the $200).

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CPTI SEMINAR DATE!!

CPTI SEMINAR DATE -- DENVER, CO - OCT. 15/16
We have liftoff, folks. I received an enthusiastic response from the good people in the Denver area. I'm pleased to announce the next CPTI seminar will take place on Saturday & Sunday, October 15th & 16th in Denver.

Our CPTI seminars are limited to ONLY 25 ATTENDEES. If you're a serious options trader and you want to learn the nuances of our advanced non-directional trading strategies and hone your trading skills, contact me ASAP at mparnos@optioninvestor.com. I'll send you all the pertinent information. The price is right -- $995.00 -- about half of one profitable Iron Condor trade -- and you'll have a two-day experience that you'll remember, and profit from, for a lifetime.

Our recent Philadelphia CPTI Seminar was a great success (they all are). There are now 25 newly enlightened minds, with smiles attached, ready to generate a healthy annual return using our CPTI strategies. Remember, if you attend one of my CPTI seminars, you are entitled to retake the seminar a second time at NO CHARGE!

30 OUT OF 33 PROFITABLE MONTHS!

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

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. Contact me at mparnos@optioninvestor.com. 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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