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THE CPTI "WATCH LIST"

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It seems like everyone has a watch list these days. Just the words "watch list" sends chills up the spines of traders everywhere - unless, of course, you're a CPTI student. For CPTI students, "watch list" has an entirely different meaning.

Here is this week's CPTI Watch List:
Tuesday, 8 pm (ET) - American Idol
Tuesday, 9 pm (ET) - House
Friday, 10 pm (ET) - Monk

Plus, at the end of the week, you can "watch" as our April positions expire worthless and we take another profitable and leisurely stroll to the bank.

If You're Gonna Dance, You Gotta Pay The Band
Tomorrow (April 17th) is this year's deadline to pay the band. The Tax Man Cometh. It's time to write that check. A lot of folks complain about paying a lot of tax. But, the fact is, if you're paying a lot of tax, it means you made a lot of money. It may also mean you have a lousy accountant.

I believe in paying taxes, but not any more than is absolutely necessary. A good accountant, who knows the ins and outs of trader accounting strategies and entities, can save you thousands.

Some brokerage firms will send you a list of all your options transactions. Others will have a online platform that allows you to download everything into Quicken or Microsoft Money programs - or just onto an Excel spreadsheet. The one thing brokers don't do (at least the ones I know about) is report option transactions to the IRS. I don't know why. But know that, just because the profits (or losses) aren't reported, the IRS still wants its share.

For stock transactions, brokers report to the IRS the proceeds of the sales of stocks. Then, it's your job to dig through your records and report the cost basis and any profit or loss. With option transactions and results, it's sort of on the honor system.

Who's To Blame For Our Income Tax?
Napoleon. That's right. It was all his fault. In the late 1700s, the little fellow was acting out his short-person insecurities (they named a complex after him). In his quest to take over the world, his French army was plowing through Europe rather easily. Great Britain saw him coming and figured they needed a few extra bucks to shore up their army. So, in 1799, the British government levied a 10% income tax on their citizens.

Then, good old Abe Lincoln, in the early 1860s, decided to levy an annual income tax to generate money to fight the Civil War. Back then, you paid 3% if your annual income was between $600 and $10,000. If you earned over $10,000, the tax was 5%. That was just the beginning. By 1864, the tax rate for over $10,000 was raised to 10% -- and really pissed off John Wilkes Booth.

At first, income tax accounted for less than 5% of federal revenues. By 1940, it accounted for 20%. By 1970, 70 percent. Today, 43% of federal revenues come from income taxes, personal and corporate. Social security, Medicare, unemployment taxes, and other retirement taxes account for 32%. Excise, customs, estate, gift, and other taxes bring in 7%. Uncle Sam borrows the rest.

Countdown To Newark
Less than two weeks remain to the 2-day CPTI advanced seminar (April 29th & 30th) in Newark, N.J.. There are still spots left for a few serious east coast option traders. Want to hone your trading skills and pick up extra premium on your trades? Contact me. (Contact Support). I'll call you to go over all your questions and all the details. Don't put it off!! Procrastination, especially in our business, is a bad habit. If you wait too long to pull the trigger on a trade, often the opportunity disappears.

Spots also still remain for my June CPTI San Francisco seminar. See below for details.

Happy Easter!!
This is one of those times of year when family gets together. Enjoy the food. Enjoy the people who are important to you and appreciate what you have. Life is too short.

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CPTI CURRENT APRIL POSITIONS
CPTI April Position #1 - RUT Iron Condor - 751.11
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 - 1289.12
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 - 751.11
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 - 1289.12
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 - 755.11
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 - 1289.12
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 - 751.11
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
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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