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RECENT PORTFOLIO ACTION & DECEMBER QUICKIES

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RECENT PORTFOLIO ACTION & DECEMBER QUICKIES

We've had a flurry of activity in our CPTI portfolio so far this week. For those who may have missed it, let's review.

1. Monday, CPTI students had another chance to get into the previously suggested SPX January 1200/1190 bull put spread. Quite a few did.

2. On Tuesday, with the market looking strong and threatening to continue up, I determined it was time to close the December RUT and SPX bear call spreads. No sooner did I post the announcement then the market reversed and came back down hard. That gave us a chance to close out the positions at lower prices.

Some CPTI students closed their positions while others held on. The market has continued to pull back. Those who chose to hold on have a good chance of keeping their profits this month. Good for them. But I would do it all over again exactly the same way. It's an exercise in self-discipline. It's all about preservation of capital. Will I be wrong sometimes? Hell yes. Is my money intact? Hell yes. Am I alive to trade another day? Hell yes.

3. Thursday we put the bear call spreads on or two January RUT & SPX positions -- completing the Iron Condors. It appears that the market is at least pausing. The upward move is showing a few cracks in its armor -- enough to where I felt comfortable putting our short strikes about 50 points higher than the underlying indexes.

If everything works out in January, we're going to be able to post a very nice profit -- a nice way to start the year.

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IT'S QUICKIE TIME AGAIN
Every month about this time we make a vallant effort to try to tame the market for about a week -- and bring in some profits. Since the upward trend has stalled, maybe the market will consolidate long enough for us to make some money. Remember, these are not CPTI portfolio trades. They are for experienced traders who have the time to watch the market and the self-discipline to act when required. And don't forget how much fun the Friday morning settlement is. I do not trade these quickies, but some CPTI students do -- and make out quite well. Trade at your own risk.

December Quickie #1 - SPX Iron Condor - 1255.84
Sell 10 Dec. SPX 1280 Calls - SZPLP
Buy 10 Dec. SPX 1290 Calls - SZPLR
Credit of about $.55 ($550)

Sell 10 Dec. SPX 1230 Puts - SZPXF
Buy 10 Dec. SPX 1220 Puts - SZPXD
Credit of about $.65 ($650)

Total credit and profit potential of about $1.20 ($1,200). Maximum profit range of 1230 to 1280. Maintenance is $10,000 -- IF you have the right broker.

December Quickie #2 - MID Siamese Condor - 741.06
Sell 10 MID Dec. 740 Calls @ $6.80 - MIDLH
Sell 10 MID Dec. 740 Puts @ $5.10 - MIDXH
Total premium taken in - about $11.90 ($11,900)

Buy 10 MID Dec. 710 Puts @ $.40 - MIDXB
Buy 10 MID Dec. 770 Calls @ $.25 - MIDLN
Total cost of long options - about $.65 ($650)

Total net premium is $11.25 ($11,250). Profit range is 728.75 to 751.25. Exit points are the same as profit range parameters. The closer MID finishes to 740 the more money you can make.

Want to learn more about the Siamese Condor? Come to a CPTI seminar. See info below.

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GIVE YOURSELF THE GIFT OF KNOWLEDGE!!
TWO NEW CPTI 2-DAY ADVANCED SEMINAR DATES ANNOUNCED

It's that time of year. Don't give yourself a wallet. Give yourself the gift that will teach you how to fill your wallet. It's a gift that will last a lifetime. Strategies that work -- over and over and over again!! I'll teach you how making money can be boring -- and profitable. I"m booking reservations every day. Don't wait too long!

Email me for information -- but only if you're a SERIOUS trader who wants to learn. I'm here for you. I'll be glad to send you all the details and call you to go over your questions. The seminars are both fun and informative. Contact me: mparnos@optioninvestor.com.

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CPTI CURRENT DECEMBER POSITIONS
CPTI December Position #1 - SPX Iron Condor - 1255.84
We sold 12 December SPX 1150 puts and bought 12 Dec. SPX 1135 puts for a credit of $.80 ($960). Then we sold 12 December SPX 1285 calls and bought 12 Dec. SPX 1300 calls for a credit of $.60 ($720). Total net credit and profit potential of about $1.40 ($1,680). Maximum profit range is 1150 to 1285. Maintenance is $18,000.

CPTI December Position #2 - RUT Iron Condor - 685.22
With the RUT trading at about 658, we sold 15 Dec. RUT 590 puts and bought 15 Dec. RUT 580 puts for a credit of $.60 ($900). Then we sold 15 Dec. RUT 720 calls and bought 15 Dec. RUT 730 calls for a credit of $.55 ($825). Our total credit and profit potential is $1.15 ($1,725). The maximum profit range is 590 to 720. Maintenance is $15,000.

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CPTI CURRENT JANUARY POSITIONS
CPTI January Position #1 - RUT Iron Condor - 685.22
We sold 15 Jan. RUT 620 puts and bought 15 Jan. RUT 610 puts for a credit of $.65 ($900). Then we sold 15 January RUT 740 calls and bought 15 RUT January 750 calls for a credit of $.55 ($825). Total premium and profit potential is $1,725. Our maintenance is $15,000.

CPTI January Position #2 - OEX Bull Put Spread - 573.87
We sold 15 OEX January 545 puts and bought 15 OEX January 535 puts for a credit of $.50 ($750). Maintenance is $15,000.

We're going to be waiting for an opportunity to put on the bear call spread to complete the Iron Condor. If we get the opportunity, great! If not, we'll be satisfied with just holding the bull put spread.

CPTI January Position #3 -- SPX Iron Condor - 1255.84
We sold 15 SPX January 1200 puts and bought 15 SPX January 1190 puts for a credit of $.60 ($900). Then we sold 15 SPX January 1320 calls and bought 15 SPX January 1330 calls for $.65 ($975). Total premium and profit potential of $1,875. Maintenance is $15,000.

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ONGOING STRATEGIES
ZERO-PLUS Strategy - January RUT Iron Condor - 685.22
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.

As we did in our CPTI portfolio account, we closed our 1235/1245 Nov. bear call spreads for a loss of $1,350. We deduct the $1,350 from our previous cash position of $37,600 to establish our new cash position of $36,250.

New Zero Plus Position:
With the RUT trading at about 685, we sold 20 Jan. RUT 620 puts and bought 20 Jan. RUT 610 puts for a credit of about $.65 ($1,300). Then we sold 20 Jan. RUT 750 calls and bought 20 of the Jan. RUT 760 calls for $.45 ($900). Our maintenance is $15,000. Our maximum profit range is 620 to 750. Our net credit and profit potential is $1.10 = $2,200.

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QQQ ITM Strangle - $41.56
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.

Near October expiration, with the QQQQs trading near $38, we rolled our short October $37 puts and calls to the short November $37 puts and calls.

Based on these figures, the new total of generated premium (through the November cycle) is $5,950 ($5,350 plus the $600).

We currently are short the December $37 calls. We have no short put position at this time.

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NEW DATES FOR CPTI 2-DAY ADVANCED SEMINARS -
February 4 & 5 - Atlanta, GA
February 18 & 19 - Las Vegas, NV

Our next CPTI seminars will be on Saturday & Sunday, February 4th & 5th in Atlanta and February 18th & 19th in Las Vegas.

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 -- less than the profit from one Iron Condor trade -- and you'll have a two-day experience that you'll remember, and profit from, for a lifetime.

Our latest Denver CPTI Seminar was a great success (no surprise, they all are). There are now 25 more 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!

33 OUT OF 36 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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