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TWO DAYS TO 35 OUT OF 38 MONTHS

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ONE DAY TO 35 OUT OF 38 PROFITABLE MONTHS

For our CPTI strategies, what do we need to be successful? A brokerage account, money in the account, a comprehensive knowledge of the strategies, and the balls to use them. Another ingredient is the ability to think.

Thinking about your trading isn't always as easy as one might think. Everyday life provides us with plenty to think about - everything from your job, home, wife, girlfriend, sex, where you left your remote control, what you're going to defrost for dinner, sex (again) - the list goes on and on.

After accommodating such a daunting such a demanding list of things to think about, how much grey matter remains for you to devote to your trading? Well, I guess it depends on an individual's thinking threshold. After a typical day, many people can only handle the Cartoon Channel or maybe a Roseanne rerun.

Well, help is on the way --- at least for cultivating the ability to think in the next generation. In Southfield, Michigan the third grade curriculum now includes playing chess. Other local cities are taking note, because the children are developing the ability to do math problems in their head and to handle all kinds of life situations they wouldn't typically be able to deal with. Those who take chess seriously will cultivate their ability to think, to anticipate, and to problem solve.

The program is getting rave reviews from parents, who say their children's behavior and attention spans have improved significantly. Plus, improvement is also showing up on the kid's test scores. Why? Because those who have developed better thinking skills are better able to handle life - and subsequently prepare oneself for the demands of trading.

So, you get the first move. Find a chess partner and start to learn. If you can't find a partner, well, there are dozens of computer chess games (many free) for every level. Also, there's a great little movie you should see - "Searching For Bobby Fisher." You should be able to rent it for a buck. It's an oldie, but a goodie - and, it's PG.

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How Well Are You Going To Sleep Tonight?
This is the much anticipated, and often dreaded, time of the month. It's Thursday and the markets are closed for the day. It's time for the trader's version of PMS (Pre-Market Settlement). Unfortunately, there are no pills you can take to lessen the stress. If you haven't taken precautions by now, it's too late. You'll have to grin and bear the results - and the pain won't subside until Friday afternoon.

Our January CPTI Portfolio positions don't seem to be at risk. We have:
1) A 25 point cushion on our RUT Iron Condor
2) A 35-point cushion on our SPX Iron Condor
3) A 37-point cushion on our OEX Bull Put Spread

Now, we've witnessed some strange Friday morning settlements in recent months, but I feel pretty comfortable with these cushions. I'll sleep real well tonight.

There are some more aggressive CPTI students who dared to bring in the short strike prices by 5, 10, or 20 points. They may survive the January cycle just fine if we get reasonable settlements. That can be good and bad. Success can lead to confidence - sometimes a false confidence. It's dangerous to become confident taking additional risks. They then start to rationalize taking slightly more risk, and then more risk - until that one month comes along and they get their ass handed to them.

The Quickies
The SPX 1305/1315 and 1265/1255 Iron Condor is in great shape. The SPX is trading smack in the middle.

The RUT 720/730 bear call spread might be a little exciting. It's only 5 points away from the short 720 call. However, the aware and prudent trader could have easily bought back the short 720 call earlier on Thursday for a dime or $.15.

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Options On $VIX
Do we need another index? Why not? Maybe it will be something we can use with our CPTI strategies. The CBOE recently issued this press release:

CHICAGO, January 11, 2006 -The Chicago Board Options Exchange (CBOE) announced today that it plans to list options on the CBOE S&P 500 Volatility Index, "VIX," (options ticker symbol VIX) on Friday, February 24, 2006. Derived from real-time S&P 500 Index (SPX) option prices, VIX is designed to reflect investors' consensus view of expected stock market volatility over the next 30 days. Some market analysts consider VIX the "investor fear gauge" since during periods of economic uncertainty, investors buy portfolio protection in the form of index options.

Note: Something weird about the new VIX options - their expiration schedule. We're used to the European style options settlement schedule of options cease trading on Thursday and a Friday morning settlement. Well, the new VIX options will be on Tuesday prior to expiration and the settlement value is computed on Wednesday. Why? Hell if I know. Maybe they're just trying to confuse us. Well, it's working.

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COUNTDOWN TO ATLANTA - ONLY 2 WEEKS
That Extra Bit Of Knowledge Can Make A Huge Difference!!

Want to learn how to get those extra nickels and dimes on your spread trades? They really add up. Come join me in Atlanta for two days of information and fun. It seems like most people have signed up for Vegas. There are still spots open in Atlanta and only a few left in Vegas. Don't put it off!! It's an investment in your future. They say that money can't buy love. Wouldn't you like to see for yourself?

It's the start of a new year. Time to turn over a new leaf. There are profits waiting for you out there. But you have to make the effort. Give yourself the gift that will teach you how to fill your wallet. It's a gift that will last a lifetime. Attend a CPTI seminar and learn 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 daily. Don't wait too long! Vegas spots are going fast!

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 contact you to go over your questions. The seminars are both fun and informative. Contact me today: Contact Support.

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CPTI CURRENT JANUARY POSITIONS
CPTI January Position #1 - RUT Iron Condor - 714.94
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 - 582.51
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 waited for an opportunity to put on a bear call spread to complete the Iron Condor, but nothing looked great. So, we are settling for just holding the bull put spread.

CPTI January Position #3 -- SPX Iron Condor - 1285.04
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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CPTI CURRENT FEBRUARY POSITIONS
CPTI February Position #1 - SPX "Sure Thing" Credit Spread - 1285.04
We originally sold 2 February SPX 1275 calls and bought 2 February 1300 calls for a net credit of about $7.40 ($1,480). The initial maintenance requirement was $5,000. Our profit potential was $1,480. When the market started back up, we reversed our position and put on four contracts of the 1280/1255 bull put spread. Our current adjusted profit potential is $1,420 and the new maintenance is $10,000. Now, we can root for the SPX to remain above 1280.

CPTI February Position #2 - SPX Iron Condor - 1285.04
We sold 10 February SPX 1175 puts and bought 10 February SPX 1160 puts for a credit of $.80 ($800). Then we sold 10 February SPX 1325 calls and bought 10 February SPX 1340 calls for a credit of about $.65 ($650). Our total net credit and profit potential of about $1.45 ($1,450). Maximum profit range is 1175 to 1320 = 150 points. Maintenance requirement is $15,000 (IF you have the right broker).

CPTI February Position #3 - RUT Iron Condor - 714.94
We sold 15 February RUT 640 puts and bought 15 February RUT 630 puts for a credit of $.50 ($750). Then we sold 15 February RUT 750 calls and bought 15 February RUT 760 calls for a credit of $.50 ($750). Our total net credit and profit potential of $1.00 ($1,450). Maximum profit range is 640 to 750 = 110 points. Maintenance requirement is $15,000 (IF you have the right broker).

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ONGOING STRATEGIES
ZERO-PLUS Strategy - January RUT Iron Condor - 714.94
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.

Current 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 - $42.52
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 December expiration, with the QQQQs, we rolled our short December $37 calls to the short January $37 calls.

The total of generated premium (through the January cycle) is still $5,950.
We currently are short the January $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 Saturday & Sunday, 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 - ONLY $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.

The recent 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!

34 OUT OF 37 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 (though many often do) 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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