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ON THE VERGE -- AGAIN!!

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ON THE VERGE - AGAIN!!

Only A Settlement Away
We're on the verge of experiencing our 36th profitable month (out of 39). Our SPX and RUT positions seem to be in safe territory - in spite of the unpredictability of tomorrow mornings announcement. Will 18.08 points be enough on the RUT? Will 36.62 points be enough for the SPX? (drumroll please) Stay tuned to your quote machine for the results!! Thousands of dollars hang in the balance!! - Hell, this is better than reality TV.

Friday Morning Settlement Numbers
Well, fans, here we are again. One month older and apparently one month richer - just how richer we'll find out tomorrow. Our February positions look to be in excellent shape. But, we can never completely overlook the adventure of our Friday Morning Settlement.

CPTI students know that trading stops on European style options at Thursday's close. The settlement number is a calculation of the opening prices of the respective indexes on Friday morning. The true settlement numbers are normally posted early Friday afternoon. The settlement symbol for the SPX (S&P 500) is $SET. The settlement symbol for the RUT (Russell 2000) is $RLS.

I Got A Call From My Broker This Morning
My broker called me today and asked me if I would like to have my maintenance funds released if the settlement numbers came in out of the money on Friday. The answer: Yes and thank you. It was very thoughtful. It was more than that. It was good service.

How many of you are working with brokerages that will release your maintenance on Friday afternoon? How many of you don't have access to use your maintenance dollars until Monday? How many of you have never even asked your broker about their policy?

What's the advantage of having your funds available on Friday as opposed to Monday? It's simple logic. If you find a trade opportunity you like on Friday, you might be able to take in $1.00 in premium. That same trade (all else being equal) might only bring in $.90 or $.95 in premium. The difference comes from the fact that two more days of time erosion have reduced the premium available. So, there is a decided advantage of having your maintenance dollars available for a new position should you find one. Believe me when I say that those nickels and dimes add up.

This weekend is a perfect example. Monday is President's Day and the markets are closed. Many will have to wait until Tuesday to trade. Wouldn't you rather have those extra premium dollars in YOUR pocket?

A Gold Medal Night's Sleep
I recently discovered a cure for insomnia. I'll probably have to run it by the FDA (Federal Drug Administration), but it's in a phase five approval stage. For the last five nights, I watched the Winter Olympics and, eureka!! The next thing I knew it was morning. I'm going to TIVO the Winter Olympics. Why? I need my beauty sleep - all I can get.

Ask Me For $80 - I Dare You!!
Have you seen the commercial where the teenage girl asks her father for $80 for a pair of designer jeans? The idiot actually gives her the money. Gee, what a great dad, or is he? The first thing he does is get the name of the maker of the jeans. Then he goes and buys shares of the stock. What is he? All together now - A DIRECTIONAL TRADER!! And with the example he's setting, he's raising another directional trader. His future is predictable. He's already out the $80 -- and will likely lose money on his trade, too - but he saved $5 on a commission!! Shrewd fellow.

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NEW CPTI SEMINAR DATES:
APRIL 29TH/30TH - NEW YORK CITY
MAY 13TH /14TH - SAN FRANCISCO

You asked for it - You got it. This Spring the CPTI Profit Train is going coast to coast. I've had numerous requests to come to the east coast and also to return to the west coast.

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. That Extra Bit Of Knowledge Can Make A Huge Difference!!

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 of upcoming seminars and contact you to go over your questions. The seminars are both fun and informative. Contact me today: Contact Support. (More seminar info below)

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CPTI CURRENT FEBRUARY POSITIONS
CPTI February Position #1 - SPX Iron Condor - 1289.38
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 #2 - RUT Iron Condor - 731.92
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 ($1,500). Maximum profit range is 640 to 750 = 110 points. Maintenance requirement is $15,000 (IF you have the right broker).

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CPTI CURRENT MARCH POSITIONS
CPTI March Position #1 - SPX Iron Condor - 1289.38
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).

CPTI March Position #2 - RUT Iron Condor - 731.92
On Wednesday 2/1, we sold 15 March RUT 660 puts and bought 15 March RUT 650 puts for a credit of about: $.40 ($600). Then we sold 15 March RUT 790 calls and bought 15 March RUT 800 calls for a credit of about: $.50 ($750).

Total net credit and profit potential of $.90 ($1,350). Maintenance is $15,000 (IF you have the right broker). Maximum profit range is 660 to 790.

CPTI March Position #3 - SPX Iron Condor - 1289.38
With the SPX at about 1265 we sold 10 March SPX 1190 puts and bought 10 March SPX 1175 puts for a credit of $.75 ($750). Then, a few days later on a bounce, we sold 10 SPX March 1320 calls and bought 10 March SPX 1335 calls for a credit of $.80 ($800).

Our total net credit is $1.55 ($1,550). Our maximum profit range is 1190 to 1320 - a 140 point range. The maintenance is $15,000 (IF you have the right broker).

CPTI March Position #4 (Formerly Feb. Position) - SPX "Sure Thing" Credit Spread - 1289.38
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. We reversed our position and put on four contracts of the 1280/1255 bull put spread. Our current adjusted profit potential is $1,420 with new maintenance of $10,000. We had to reverse again. Our new position is a 1280/1305 bear call spread with a profit potential of $1,600. We now want the SPX to close below 1280.

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ONGOING STRATEGIES
ZERO-PLUS Strategy -
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 - 1266.99
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.

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QQQ ITM Strangle - Syonara
We owned 10 January 2007 $42 puts and 10 January 2007 $32 calls at a total cost of $14,600. Only $4,600 was at risk as the other $10,000 of intrinsic value would always be there.

ADJUSTMENT: Closed Out QQQ ITM Strangle Position

This week, with the QQQQs trading at about $40.55, we bought back the short February $37 call for $3.60 ($3,600). Then we sold the Jan. 2007 $32 calls for $10.20 ($10,200). We also sold our Jan. 2007 $42 puts for $2.90 ($2,900). Our net credit for these transactions was $9,500.

It originally cost us $14,600 to initiate the position. We collected, over the life of the trade, $5,950 in premium. We had $9,500 plus the $5,950 premium for a total of $15,450. Subtracting our initial cost of $14,600 leaves us with a profit of $850. It's not that much considering all the effort we put forth, but a profit is still a profit. Now, the funds that were tied up are free for use in a better opportunity. Our return on the $4,600 risk was about 18.5%.

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NEW CPTI SEMINAR DATES:
APRIL 29TH/30TH - NEW YORK CITY
MAY 13TH /14TH - SAN FRANCISCO

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 Atlanta CPTI Seminar was a great success (no surprise, they all are). There are now many 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 my 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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