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FIRST JULY CPTI POSITION DISCUSSED

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FIRST JULY POSITION DISCUSSED

I hope everyone is having an exceptional Memorial Day weekend. One of the things I enjoy best about a holiday weekend is that the markets are closed on Monday. That's one less day that we're exposed to market movements - one less day that something catastrophic can happen to our positions.

This week it should be interesting to see if the market goes back down to test this move up. Likely there will be some form of consolidation

Our New CPTI July Position
On Friday, 5/26, we put on our first position for July - a bull put spread 1165/1150 for a credit of $.60. I watched as hundreds and hundreds of the 1165/1150 spreads were filled throughout the day at that credit limit. As you know, I like to trade on Fridays, if there is something worthwhile available. Why? Simply because there is more premium available on Friday than after a three day weekend. Even if it's only a nickel or a dime, it's worth it. Those nickels and dimes really add up.

We'll have quite a while to wait to July expiration - about 8 weeks. July is a five-week option cycle. But I'm quite confident. Look at the cushion. As of Friday's close, we have a cushion of 115 points. I like out chances - a lot.

Let's wait a while to see if the last few up days in the market are just an oversold bounce or a trend reversal. If it's a trend reversal, perhaps, we can find a topside (bear call spread) and turn our position into an Iron Condor. If we can't, then we'll be content with our bull put spread. Remember, you never want to force a position. That means you'll be making a compromise somewhere along the line - and it's those compromises that will come back to haunt you.

I received an email from a CPTI seminar grad explaining that, near Friday's close, he found a topside to our SPX position that he liked. He sold the 1360 SPX calls and bought the 1375 SPX calls for a credit limit of $.50. However, because the SPX was only 80 points from the short 1360 call, he hedged his bet by only putting on 8 contracts of the bear call spread instead of 12. That doesn't change the short strike, but it limits the exposure in case the market takes off to the upside.

While we're waiting, we'll keep an eye out for July trades on other indexes. During last week, the volatility (VIX) spiked to almost 20 (19.87). It hasn't been up there in quite some time. It since moved back to 14.26 - still above the 11.5 to 13.5 level where it has been mired since December of last year.

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COUNTDOWN TO SAN FRANCISCO - JUNE 17/18
TESTA-MONEY-ALS
Mike -- Just wanted to let you know that one of the things I got the most value out of from your class was how to negotiate with the market makers. Based on the extra premium I made on a couple condors this past month, I made almost enough to pay for the class. J.R.

Hey Mike -- I almost always laugh when I read your newsletters. I have learned a lot since I sat - so very green - in your class, and learned so much. I have been making a living these last 2 1/2 months trading. Thanks for your continued coaching. I plan to retake your class sometime this summer. Doug B.

DO YOU HAVE PROFIT-ABILITY?
There are a lot more testamonials where these came from. It's always a challenge for me when I have a roomful of bright people who are excited and have a passion for learning. We go over everything imaginable - from the non-directional strategies to the psychology of trading. We cover a lot more than the mechanics. Inquiring minds want to know the whens and the whys, not just the hows. That way, they're prepared for the best and the worst - and know the best way to handle either situation. There are still spots open for San Francisco. Contact me and I'll personally call you with all the details.

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CPTI CURRENT JUNE POSITIONS
CPTI June Position #1 - RUT Iron Condor - 729.55
On 5/1, we sold 15 June RUT 690 puts and bought 15 June RUT 680 puts for a credit of $.55 ($825). Then, we sold 15 June RUT 830 calls and bought 15 June RUT 840 calls for a credit of $.55 ($825). Our total credit and profit potential is $1.10 ($1,650). Maximum profit range is 690 to 830 (130 points!). We'll be exposed for about seven weeks. Maintenance is $15,000 - IF you have the right broker.

CPTI June Position #2 - SPX Bull Put Spread - 1280.16
On 5/3, we sold 12 June SPX 1230 puts and bought 15 June SPX 1215 puts for a credit of $.60 ($720). Maintenance is $18,000.

CPTI June Position #3 - SPX - Iron Condor - 1280.16
On 5/16 with the SPX trading at about 1295, we sold 12 June SPX 1220 puts and bought 12 June SPX 1205 puts for a credit of $.50 ($600). Then we sold 12 June SPX 1350 calls and bought 12 June SPX 1365 calls for a credit of $.70 ($840). Total net credit and profit potential of $1.20 ($1.440). Our maximum profit range is 1220 to 1350. The maintenance is $18,000 -- IF you have the right broker.

CPTI June Position #4 - RUT - Iron Condor - 729.55
On 5/22, we sold 15 June RUT 780 calls and bought 15 June RUT 790 calls for a credit of about $.45 ($675). Then we sold 15 June RUT 640 puts and bought 15 June RUT 630 puts for a credit of about $.50 ($750) for a total net credit and profit potential of about $.95 (1,425). Our maximum profit range is about 140 points - from 640 to 780. Maintenance is $15,000 - IF you have the right broker.

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ONGOING STRATEGIES
ZERO-PLUS Strategy -
In the past, 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 May RUT 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 $42,650 ($40,550 + $2,100).

Current Zero Plus Position: RUT Iron Condor - 725.58
On Monday we put on the identical, June RUT Iron Condor as we have in our June CPTI portfolio - consisting of 20 contracts of a bear/call spread of 780/790 and a bull put spread of 640/630 for a credit of about $.95. Our potential profit is $1,900. The maintenance is $20,000 -- IF you have the right broker. The profit range is 640 to 780.

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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 DATE:
JUNE 17 & 18 - SAN FRANCISCO, CA

We're working on month #40. It doesn't get any better. 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 call you with all the pertinent information. The price is a bargain - 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 Newark CPTI Seminar was a great success (no surprise, they all are). There are now 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!

39 OUT OF 42 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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