Option Investor
Updates

100% PROFITABLE “ IT’S A BEAUTIFUL THING!!

HAVING TROUBLE PRINTING?
Printer friendly version

100% PROFITABLE - IT'S A BEAUTIFUL THING!!

Making money never gets old. It's always fun and always refreshing - especially the months when we're 100% profitable. I never take it for granted. When you start to take it for granted, you lose focus. When you lose focus, you miss opportunities. How do you recognize these opportunities? Awareness and knowing what to look for.

CPTI Seminar grads are zeroed in. They knew that, if they have the right broker, they could get their maintenance dollars released on the expiring positions in their account. They made the calls. That enabled them to benefit and lock in the extra premium that came from the spike of volatility during Friday's trading. Will the extra premium still be there when the market opens on Monday? Maybe, maybe not. But those extra dollars are now safely in their accounts - and will likely end up as increased profits when the totals are calculated down the road. Premium in the hand is worth ________ in the bush. You fill in the blank.

MARCHING INTO MARCH
On expiration Friday, there was chaos in the markets. It started out rather calm. The indexes opened pretty close to where they closed on Thursday. But then, all hell broke loose to the downside. I talked to a few brokers during the course of the day and, all they could say that they were slammed. Google was down almost $40 and their clients were doing a great Chicken Little impression - "the sky is falling, the sky is falling!!"

The directional traders were running for the exits. Those who were short puts on stocks were running for cover and TO cover their positions. They could have closed them out for a nickel or dime the day before, but did they? Hell no. Now they're paying the price - and they're going to blame the market. Who was really to blame? Who will never take responsibility for their action (or lack of)? Take a wild guess.

Experienced CPTI students and Seminar Grads kept their kool. No need to panic. They remembered what they were taught. You probably haven't read the CPTI credo for a long time. Friday was a day to pay heed, because "Mierde happens. Be prepared."

We had a good laugh and then, at different times of the day, put on an SPX Iron Condor - for March. By keeping our cool, we have created a 150 point maximum profit range. We have huge cushions on both sides and I feel pretty darn good about this position. It's true, we have eight weeks to wait, but I couldn't resist the big range. Here's what we did:

CPTI March Position #1 - SPX Iron Condor - 1261.49
We sold 10 SPX March 1340 calls and bought 10 SPX March 1355 calls for a credit of $.85 ($850). Then we sold 10 contracts of SPX March 1190 puts and bought 10 contracts of SPX March 1175 puts for a credit of $.90 ($900)

Our total net credit and profit potential is $1.75 ($1,750). Our maximum profit range is 1190 all the way up to 1340 (150 Points!!). The maintenance is $15,000 (IF you have the right broker).

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

TRACKING CPTI PORTFOLIO RESULTS
We just completed the third month of CPTI tracking year number four. The market was a little volatile in the January cycle, but it's just the way we like it. The market ended up pretty much where it started. We've now been profitable for 35 OUT OF THE LAST 38 months -- something we can be VERY proud of. Our total profit for the first three months of our fourth tracking year is $6,435 ($2,085 + $4,350).

RECAP OF JANUARY POSITIONS - 100% PROFITABLE!!
SPX Iron Condor - PROFIT: $1,875
RUT Iron Condor - PROFIT: $1,725
OEX Bull Put Spread - PROFIT: $750
TOTAL JANUARY PROFITS: $4,350.00

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

JANUARY QUICKIE RESULTS - ALSO 100% PROFITABLE!!
This month both quickie positions worked out beautifully. Here's how they played out.

1. SPX Iron Condor - finished comfortably in the 1265 to 1305 range. Everything expired worthless and the profit was 100% of the $1,200 premium taken in. Profit: $1,650.

2. RUT Iron Condor - finished comfortably in the 690 to 720 range. Everything
expired worthless and the profit was 100% -- $1,550.00

TOTAL QUICKIE PROFITS: $3,200.
Remember, Quickies should only be traded by experienced traders. They can be tricky. Many months, like January, everything goes just fine. Other months, the manure hits the fan and you better know how to deal with a room full of manure - and the pile of manure can become higher than your pile of money.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

JANUARY SETTLEMENT NUMBERS
Write down these settlement symbols for future reference. Then, on expiration Friday, in the afternoon, you can look them up yourself. Or you can still call your broker.

S&P 500 (SPX) -- $SET = 1284.28 (European Style)
Russell 2000 (RUT) -- $RLS = 698.63 (European Style)
S&P 100 (OEX) - OEX = 571.51 (American Style)
S&P Midcap 400 (MID) -- $MIV = 772.52 (European Style)

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

ONLY 2 WEEKS TO ATLANTA
ONLY 4 WEEKS TO LAS VEGAS
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.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

SUMMARY OF CPTI JANUARY POSITIONS
CPTI January Position #1 - RUT Iron Condor - 704.60
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. PROFIT: $1,725.

CPTI January Position #2 - OEX Bull Put Spread - 571.51
We sold 15 OEX January 545 puts and bought 15 OEX January 535 puts for a credit of $.50 ($750). Maintenance is $15,000. PROFIT: $750.

CPTI January Position #3 -- SPX Iron Condor - 1261.49
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. PROFIT: $1,875.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

CPTI CURRENT FEBRUARY POSITIONS
CPTI February Position #1 - SPX "Sure Thing" Credit Spread - 1261.49
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 - 1261.49
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 - 704.60
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).

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

ONGOING STRATEGIES
ZERO-PLUS Strategy - January RUT Iron Condor - 704.60
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.

With the successful RUT position generating $2,200, our new cash position is $38,450 ($36,250 + $2,200).

Current Zero Plus Position: March SPX Iron Condor.
On Friday, we entered the same SPX Iron Condor for our Zero Plus position that we put on in our first CPTI March portfolio position. However, we did an extra few contracts.

We sold 12 SPX March 1340 calls and bought 12 SPX March 1355 calls for a credit of $.85 ($1,020). Then we sold 12 contracts of SPX March 1190 puts and bought 12 contracts of SPX March 1175 puts for a credit of $.90 ($1,080)

Our total net credit and profit potential is $1.75 ($2,100). The maintenance is $18,000.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

QQQ ITM Strangle - $41.25
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 January expiration, with the QQQQs, we rolled our short January $37 calls to the short February $37 calls.

The total of generated premium (through the January cycle) is still $5,950.
We currently are short the February $37 calls. We have no short put position at this time.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

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

Our next CPTI seminar will be on Saturday & Sunday, February 4th & 5th in Atlanta and then on 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!

35 OUT OF 38 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?

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

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

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

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.

Couch Potato Trader Updates Archives