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QUICKIES - BETTER LATE THAN NEVER

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Let's see if we can come up with a few quickie trades for the October cycle. As I say each month. These Quickie trades can be tricky and risky. They should only be attempted by experienced traders. The prices are based on Fridays closing prices. That means that on Monday, when the market opens, the prices may very well be different These positions are supplemental and are NOT CPTI portfolio positions.

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QUICKIE #1 - OEX - Siamese Condor - 550.49
With the OEX trading very close to the 550 strike price, let's take advantage of the position and put on the first Siamese Condor we've done in a long time. There are five trading days left in the Oct. cycle because OEX is an American style option.

Sell 10 Oct. OEX 550 puts

Sell 10 Oct. OEX 550 calls

Total credit of $7.00 ($7,000)

Buy 10 Oct. OEX 525 puts

Buy 10 Oct. OEX 575 calls

Total debit of $.35 ($350)

Total net credit and profit potential of $6.50 ($6,650). The closer the OEX closes to 550, the more money we will make. We have created a profit range of 543.65 to $556.65. If OEX finishes anywhere within that range, we will make something - with the potential of making close to $6,650 IF the OEX closes at the short 550 strike price.

Maintenance on the position is $25,000 (IF you have the right broker). Our exit points are well define. You should get out of the trade if the OEX violates either of the range parameters - 556.65 or 543.65.

QUICKIE #2 - SPX - Iron Condor - 1186.57

Sell 10 Oct. SPX 1165 puts
Buy 10 Oct. SPX 1155 puts
Credit of about $.60 ($600)

Sell 10 Oct. SPX 1205 calls
Buy 10 Oct. SPX 1215 calls
Credit of about $.85 ($850)

Total net credit and profit potential of $1,450. Maximum profit range of 1165 to 1205. Maintenance of $10,000. There are only four trading days and a Friday opening settlement price remaining in the Oct. cycle because the SPX is a European style option.

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CPTI CURRENT OCTOBER POSITIONS
CPTI October Position #1 - SPX Iron Condor - 1186.57

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 have a complete Iron Condor with a trading range of 1160 to 1280. Our total potential profit is $1,800. Our maintenance requirement is $15,000.

CPTI October Position #2 - OEX Iron Condor - 550.49

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.

CPTI October Position #3 - SPX Iron Condor - 1186.57

With the SPX at about 1230, 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. Maintenance is $18,000.

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CPTI CURRENT NOVEMBER POSITIONS
CPTI November Position #1 - SPX Iron Condor - 1186.57

With the SPX trading at about 1215, we sold 12 SPX November 1140 puts and bought 12 SPX November 1130 puts for a credit of about $.80 ($960). Then, we sold 12 SPX November 1280 calls and bought 12 SPX November 1290 calls for a credit of about $60 ($720). Our total credit and profit potential is $1.40 ($1,680). Maintenance is $12,000 (if you have the right broker). Maximum profit range is 1140 to 1280.

CPTI November Position #2 - RUT Iron Condor - 633.15

With the RUT trading at about 665, we sold 12 November RUT 610 puts and bought 12 November 600 RUT puts for a credit of about $.60 ($720). Then, we sold 12 RUT November 720 calls and bought 12 RUT November 730 calls for a credit of $.65 ($780). Our total credit and profit potential is $1.25 ($1,500). Maintenance is $12,000 (IF you have the right broker). Maximum profit range is 610 to 720.

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ONGOING STRATEGIES
ZERO-PLUS Strategy - September SPX Iron Condor - 1186.57
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: $33,000 + $1,700 (September Profit) = $34,700

For October we duplicated the CPTI portfolio position by selling 20 October SPX 1155 puts and bought 20 1140 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. 1285 calls and bought 20 Sept. 1300 calls for a credit of $.80 ($1,600). Our total potential profit is $2,900. Our maximum profit range is now 1155 to 1285. Our maintenance is $30,000 (15-point spread X 20 contracts).


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QQQ ITM Strangle - $38.06
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).

On September's expiration Friday we rolled out our short September positions. October is going to be another low premium month, while we wait for the QQQQs to come back down to earth. We sold the October $37 puts for $.15. Earlier in the month we had purchased back our September $37 put for $.05. We ended with a credit of only $.05 for the put side.

Near Friday's close, we bought back the September $37 calls for $2.40 and sold the October $37 calls for $2.60 -- giving us a $.20 credit. Our total net credit for the October rollout is $.25 or $250


Based on these figures, the new total of generated premium (through the October cycle) is $5,350 ($5,100 plus the $250).

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CPTI 2-DAY ADVANCED SEMINARS -

WATCH THIS SPACE!

NEW DATES TO BE ANNOUNCED SOON!

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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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