Option Investor
Updates

WE'VE BEEN BUSY LITTLE TRADERS

HAVING TROUBLE PRINTING?
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The market has been bouncing up and down, but even though it's showing some strength, it's staying in a nice little range - at least for the moment. It has given us an opportunity to put on some new May positions in the last few days. I know there are still 8+ weeks to May expiration, but we've been able to create some very impressive maximum profit ranges for the two positions.

You would think that with all this up and down movement, the volatility would have moved up and provided us with some extra premium to sell. Has that happened? Hell no. The VIX is wallowing around its multi-year lows (closing today at 11.17). We seem to be destined to remain at these levels for the foreseeable future, so we need to try and make the best of it. We simply have to become better traders to get that "extra" premium.

Review Of Today's Trade
Today, we put on a 1375/1390 and 1225/1210 SPX Iron Condor today. The market bounced up and down a few times - enabling many CPTIers to get fills. See details below, under "Current May CPTI Positions."

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Seminar Schedule Change
Well, I received the news I was anticipating. As a result, I have to reschedule the San Francisco seminar. The new San Francisco seminar date is June 17/18. For those who have inquired, it will still be at the same hotel. Contact me for further info - on San Francisco and also the Newark, NJ seminar on April 29th & 30th.

In May I will be bringing the future Mrs. Couch Potato home. I guess my refrigerator will soon have an identity crisis --- it will have to hold more than cold Arby Melts, Diet Pepsi, pizza, Lean Cuisine dinners and Haagen Daz. There might soon be - oh God - vegetables in there. And, even worse, bottled water (ugh). Maybe that's what those drawers are for where you can't see what's in them.

It will require an adjustment for sure. But, fortunately, my couch has a matching love seat -- just her size.

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Microsoft Logic
One of Microsoft's finest technicians was drafted and sent to boot camp. At the rifle range, he was given some instruction, a rifle, and bullets. He fired several shots at the target. The report came from the target area that all attempts had completely missed the target.

The technician looked at his rifle, and then at the target. He looked at the rifle again, and then at the target again. He put his finger over the end of the rifle barrel and squeezed the trigger with his other hand. The end of his finger was blown off, whereupon he yelled toward the target area, "It's leaving here just fine, the trouble must be at your end!"

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CPTI CURRENT APRIL POSITIONS
CPTI April Position #1 - RUT Iron Condor - 747.60
With the RUT trading at 732.45: We sold 10 April RUT 650 puts and bought 10 April RUT 640 puts for a net credit of $.50 ($500). Then we sold 10 April RUT 800 calls and bought 10 April RUT 810 calls for a credit of about $.45 ($450). Our total net credit and profit potential of $.95 ($950). Maximum profit range 650 to 800. Maintenance is $10,000 (IF you have the right broker).

CPTI April CPTI Position #2 - SPX Bull Put Spread - 1301.67
With the SPX trading at 1287.79, we put on one half of a possible Iron Condor. We sold 10 April SPX 1195 puts and bought 10 April SPX 1180 puts for a credit of $.60 ($600). Our credit and profit potential is $.60 ($600). We have an 82 point cushion. That's a good sleeping cushion. We'll wait on the bear call spread to see if the market is going to break out to the upside. Then we'll make a decision about what strikes to use for the bear call spread, if any.

CPTI April Position #3 - RUT Iron Condor - 747.60
On Friday, March 3rd, with the RUT trading at about 740, we put on our second RUT Iron Condor for April. We sold 12 April RUT 670 puts and bought 12 April RUT 660 puts for a credit of about $.55 ($660). Then we sold 12 April RUT 800 calls and bought 12 April RUT 810 calls for a credit of about $.55 ($660). Our total net credit and profit potential is $1.10 ($1,320). Our maximum profit range is 670 to 800 and our maintenance is $12,000.

CPTI April Position #3 (Formerly March Position) - SPX "Sure Thing" Credit Spread - 1301.67
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.

"Sure Thing" Adjustment

On Wednesday, when I was traveling, I returned to find that my order was filled to shift gears and roll out our 7 contracts of the March 1280/1305 bear call spread to 14 contracts of the April 1295/1270 bull put spread for a net debit of $.10 ($140). Our new profit potential is $1,460. Our new maintenance is now $35,000 ($2,500 x 14). Let's hope this is the last adjustment.

That's one of the benefits of having the right broker who understands your strategies and what you're trying to accomplish.

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CPTI CURRENT MAY POSITIONS
CPTI May Position #1 - RUT Iron Condor - 747.60
On 3/22, with the RUT trading from 733 to 745, we sold 15 May RUT 650 puts and bought 15 May 640 puts for a credit of $.55 ($825). Then, RUT moved up and we sold 15 May RUT 810 calls and bought 15 May RUT 820 calls for a credit of $.55 ($825). Total net credit and profit potential of $1.10 ($1,650). Maximum profit range is 650 to 810. Maintenance is $15,000 (IF you have the right broker).

CPTI May Position #2 - SPX Iron Condor - 1301.67
On 3/23, with the SPX trading from 1298 to 1304, we sold 12 May SPX 1225 puts and bought 12 May SPX 1210 puts for a credit of $.70 ($840). Then we sold 12 May SPX 1375 calls and bough 12 May SPX 1390 calls for a credit of $.75 ($900). Our total net credit is $1.45 ($1,740). Our maximum profit range is 1225 to 1375 - 150 points!! Maintenance is $18,000 (IF you have the right broker).

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ONGOING STRATEGIES
ZERO-PLUS Strategy -
A few years ago$, 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. We are not compounding our profits by dramatically increasing the number of contracts we trade. Just think of how well we would be doing if we had increased the number of contracts, even a little.

Our March SPX Iron Condor position expired worthless - according to plan. We can now officially add the $2,100 of premium to our cash stash - to take us well over the $40,000 mark. We have now generated $40,550 ($38,450 + $2,100).

Current Zero Plus Position: RUT Iron Condor - 747.60
When we put on the RUT Iron Condor as a CPTI position a few days ago (see May CPTI Position #1), we put on the same position for our Zero Plus Strategy, with one exception. Instead of 15 contracts, we put on 20 contracts. Our total net credit was $1.10 and our potential profit is $2,100.

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QQQ ITM Strangle - Closed Out QQQ ITM Strangle Position
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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CPTI SPRING SEMINAR DATES:
APRIL 29 & 30 - NEWARK, NEW JERSEY
(New Date) JUNE 17 & 18 - SAN FRANCISCO, CA

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 Las Vegas CPTI Seminar was sold out and 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!

37 OUT OF 40 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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