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IS THE JUICE WORTH THE SQUEEZE?

HAVING TROUBLE PRINTING?
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What do Paul Dana, Rory Price, and Jill Carroll have in common? They all, knowingly, put themselves in a dangerous situation. Would you lay down in front of a steam roller? They did, metaphorically. Some physically. Some emotionally.

How did they fare? Some escaped unscathed. Some didn't. Some are still alive to talk about it. Some aren't.

In case you've been living under a rock, these are all people recently in the news. Paul Dana, 30, and Rory Price, 41, were race car drivers who were tragically killed in separate crashes in the last week. Were they aware of the risks when the strapped themselves into their cars? Sure they were. Did they think that these would be their last laps? I'm sure they didn't.

Jill Carroll is the 28-year-old American freelancer for the Christian Science Monitor who was abducted in Baghdad three months ago. What was she doing in Baghdad - where people get blown up on a daily basis? Did she know she was in danger? Of course she did. Did she think anything would happen to her? Not likely. The other day, the evil people just let her go, without an explanation. She's lucky that we can talk about her in the present tense.

Think about it, here are professionals (in their respective fields) that are taking life-and-death risks - and for what? The stakes are too high for my tastes. I guess I'm a little dense. Maybe someone will explain it to me someday.

I saw a movie recently that involved people taking risks. They had a risk/reward kind of approach. A person has to ask himself - "Is the juice is worth the squeeze?" Funny thing, though, there was nothing mentioned about education. Without education, the decision becomes purely emotional. Without education, you can't accurately measure the pleasure of the "juice" or the potential pain of the "squeeze." In the movie, the character took the risk, got the girl, saved the day and they lived happily ever after. But life is not like the movies.

In our trading lives, the reason for our consistent success is because we do NOT take those risks - specifically with the CPTI style of trading. It's a matter of survival. Sure, we occasionally take a hit, but we know we will be alive to trade another day. How do we know? Because we learn the concepts, the skills, and most importantly, from the mistakes of others. That's what this column and our seminars are for. If you don't learn, or strive to learn, then you are destined to be a statistic - and it won't be pretty.

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A NEW QUARTER
Monday is the first day of the second quarter. All the shuffling is over, but there's still going to be plenty of stuff going on this week There will be lots of economic data - with the March jobs report on Friday. Then, it's the beginning of earnings announcements. Let the games begin. There still is an upward bias, but not like before. If the SPX closes below about 1290, we may go to the other direction for a while. It's the RUT we have to watch.

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GOOGLE + S&P 500 = ??????
So, Google is entering the S&P 500. With the VIX ridiculously low, maybe Google can infuse a little volatility. Will it make a difference? Probably not a lot, but let's keep an eye on it.

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CPTI CURRENT APRIL POSITIONS
CPTI April Position #1 - RUT Iron Condor - 765.14
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 - 1294.83
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 - 765.14
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 - 1294.83
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 $1,460 with new maintenance of $35,000 ($2,500 x 14). Our current position is the 14 contracts of the April 1295/1270 bull put spread.

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CPTI CURRENT MAY POSITIONS
CPTI May Position #1 - RUT Iron Condor - 765.14
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 - 1294.83
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 - 765.14
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 Previous 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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