Option Investor
Updates

READY FOR SEPTEMBER?

HAVING TROUBLE PRINTING?
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There are still two more weeks till August expiration. How are we doing? Let's check it out. For the August cycle we have four positions. Here's how we stand:

Position #1 - SPX Bull Put Spread - Our short strike is 1175. With SPX at 1279.36, we have a cushion of 104.36. This is one of our two most secure positions at this point.

Position #2 - RUT Iron Condor - Our maximum profit range is 630 to 780. With RUT at 701.26 we're right in the middle in our range. It can't get much better than that.

Position #3 - SPX Iron Condor - OK, here we have a position we need to watch. The market seems to want to move up, even though it's in a long term downtrend. SPX is at 1279.36 and our short call is at 1310. That's only 30 points - not real comfortable, but not yet a serious threat.

Position #4 - RUT Iron Condor - Another position worth watching. We're short the 740 calls and the RUT is at 701.26. As we know well, the RUT can move in chunks. Again, our 38.74 cushion isn't bad.

The good news is that there are only two weeks left of exposure to the market for the August cycle. The Fed will be out with a raise or no-raise decision. That may provide some dramatics. Earnings season is winding down. We may have a few tense moments along the way, but we CPTIers have experience - which is often called the greatest teacher - followed closely by my CPTI seminar, of course.

Note: This is for those of you (and I know you're out there) who, for some unknown reason, are still using a broker that holds maintenance on both spreads of a condor. As we make our way towards expiration, there may be opportunities to close out your out-of-the-money spreads for a nickel or a dime. You may want to do this to free up some maintenance dollars, perhaps for September positions.

Now, when I say to "close out" a position, it can be interpreted in two different ways. You can put out an order to (using the RUT bull put spread as an example); 1) Buy back the short 600 put and sell the long 590 put for a credit limit. That's closing if out as a spread. Or, 2) Buy back the short 600 put for a credit limit and keep the long 590 put. It may take longer to get filled, but you will save a commission and still have the long 590 put as a lottery ticket - just in case.

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NEW CPTI PORTFOLIO POSITION
CPTI September Position #1 - SPX - Bull Put Spread - 1279.36
On Monday, August 7th, with the PX at about 1280, we will try to:
Sell 12 SPX September 1190 puts - SPTUR
Buy 12 SPX September 1175 put - SPTUO
Credit limit of about $.70 ($840)

Remember, this trade is based on Friday's closing numbers. It's likely that the numbers will be different at Monday's open. There is almost a 90 point cushion. Not bad. Maintenance is $18,000. I'll be looking for an opportunity to put on a bear call spread to complete the Iron Condor. It's always a more efficient use of our maintenance dollars to have a complete Iron Condor. But, we're not going to force it. We will not compromise the safety level of our strike prices just for the sake of picking up a little more premium

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NEW SEMINAR DATE - Nov. 11/12 - Ft. Lauderdale
The Couch Potato Trader has a great following in Florida. We had an excellent seminar in Jacksonville last year and now I'm in the process of finalizing the arrangements for another visit to the Sunshine State - this time to Ft. Lauderdale. So, adjust your schedule and plan to attend. Contact me. I will personally call you to go over the details and answer your questions.

If you don't want to wait until November, the Chicago CPTI seminar is only a week away. It's not too late. There re still spots available. Don't be shy. Contact me. You're retirement account will love you for it.

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CPTI CURRENT AUGUST POSITIONS
CPTI August Position #1 - SPX - Bull Put Spread - 1279.36
On Thursday morning, 7/6, with the SPX at about 1273, we put on our first position for August - 12 contracts of a bull put spread 1175/1160 for a credit of $.60 ($720). I watched as hundreds and hundreds of the 1165/1150 spreads were filled throughout the day at that credit limit. At this writing, we have a nice fat 90 point cushion.

CPTI August Position #2 - RUT - Iron Condor - 701.26
On 7/10, with the RUT trading at about 713 we sold 15 RUT August 780 calls and bought 15 RUT August 790 calls for a credit of $.65 ($975). Then we sold 15 RUT August 630 puts and bought 15 RUT August 620 puts for a credit of $.50 ($750). Total net credit of $1.15 ($1,725). Max profit range is 630 to 780. Maintenance is $15,000 - IF you have the right broker.

CPTI August Position #3 - SPX - Iron Condor - 1279.36
On 7/17, with the SPX at about 1235, we sold 12 August SPX 1125 puts and bought 12 August SPX 1110 puts for a credit of $.60 ($720). Then we sold 12 August SPX 1310 calls and bought 12 August SPX 1325 calls for a credit of about $.60 ($720). Total net credit and profit potential of $1.20 ($1,440). Max profit range is 1125 to 1310. Maintenance is $18,000.

CPTI August Position #4 - RUT Iron Condor - 701.26

On Friday afternoon, 7/21, with the RUT at about 671, we sold 15 August 600 puts and bought 15 August RUT puts for a credit of about $.65 ($975). Then we sold 15 August RUT 740 calls and bought 15 August RUT 750 calls for a credit of about $.50 ($750). Total net credit and profit potential is $1.15 ($1,720). Maximum profit range is 600 to 740. 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 July RUT Iron Condor position expired worthless - according to plan. We can now officially add the $2,300 of premium to our cash stash - to take us well over the $40,000 mark. We have now generated $44,950 ($42,650 + $2,300).

August Zero Plus Position: RUT Iron Condor - 701.26
On Friday 7/21, with the RUT at about 671, we sold 20 August 600 puts and bought 20 August RUT puts for a credit of about $.65 ($1,300). Then we sold 20 August RUT 740 calls and bought 20 August RUT 750 calls for a credit of about $.50 ($1,000).

Total net credit and profit potential of $1.15 ($2,300). The maximum profit range is 600 to 740 - 140 points. Maintenance is $20,000 - IF you have the right broker.

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CPTI SEMINARS!
AUGUST 12/13 - CHICAGO
NOVEMBER 11/12 - FT. LAUDERDALE

Now you have two choices for which CPTI seminar you'd like to attend. Don't put off making your reservation. Airline tickets get more costly the closer you get to the event. If you really want to take your trading from a "hobby" to a potentially profitable "business," you'll want the information you'll learn at my CPTI seminar. You'll learn more than the "how to's" of trading our strategies. You'll learn a new lifestyle - and a nice lifestyle - one that can last a lifetime.

DO YOU HAVE PROFIT-ABILITY?
It's always a challenge (and a pleasure) for me when I have a roomful of bright people who have a passion for, and are excited about, 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 Chicago. Contact me and I'll call you with all the details.

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 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. Our CPTI seminars are limited to ONLY 25 ATTENDEES.

The San Francisco 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!

41 OUT OF 44 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 should 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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