Option Investor
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"WINDY CITY" WISDOM

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We're in the "windy city" at our CPTI seminar and I'm adding a few gusts of my own hot air to the mix. It hasn't reached tornado status yet, but there's still a whole day left.

Actually, I have another excellent group of serious traders here in Chicago from all over the United States who are dedicated to becoming "better" traders. My kind of people -- a roomfull of new friends.

As we head towards our 42nd profitable month out of 45, we'll be looking for one or two additional positions for the September cycle. September is a four week option cycle. The upcoming October cycle will be a five week cycle - which means there may be a little additional premium available. But, let's not get ahead of ourselves. We need to take care of September first.

On Thursday, in my personal account, I put on a "short guts" position. I sold the SPX August 1250 calls and the 1280 puts and took in a credit of $38.10. Now, if you remember the strategy, I'll be giving back $30 of the $38.10. I did only two contracts. But, if the SPX finishes between 1250 and 1280, I will make the $8.10 X 2 contracts = $1,620.

My profit range is 1241.90 to 1288.10. It's a bit aggressive, I know. But, if I'm going to teach the "Short Guts" strategy at my seminars and write about it here, I figure I better get some first hand experience in dealing with both the positive and negative aspects of the strategy.

Will I hold both short options all the way to expiration? It's possible, but if I have the opportunity to exit the trade early and lock in three or more dollars of profit, I will. In this short term (about a week) trade, I don't want to be exposed to the market any more than necessary - especially considering that, if I were to hold it to expiration, I'd have to deal with the Friday morning settlement. The settlement is something I'd like to avoid, if possible.

The maintenance on this position was heavy - over $60,000. But remember that even though maintenance is being held, it doesn't mean that all the maintenance is at risk. I'll be watching this trade very closely and let you know how it works out.

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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.

Tomorrow I'm off to Chicago for another great CPTI seminar. I look forward to meeting the inquiring minds of serious traders.

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CPTI CURRENT AUGUST POSITIONS
CPTI August Position #1 - SPX - Bull Put Spread - 1266.74
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 - 679.04
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 - 1266.74
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 - 679.04

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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NEW CPTI PORTFOLIO POSITION
CPTI September Position #1 - SPX - Bull Put Spread - 1266.74
On Monday, August 7th, with the SPX at about 1280, we sold 12 SPX September 1190 puts and bought 12 SPX September 1175 puts for a credit of $.70 ($840). Maintenance is $18,000. I'll be looking for an opportunity to put on a bear call spread to complete the Iron Condor.

CPTI September Position #2 - RUT - Iron Condor - 679.04
On Thursday, August 10th, with the RUT at about 686, we sold 15 RUT September 590 puts and bought 15 RUT September 580 puts for a credit of $.55 ($825). Then we sold 15 September RUT 750 calls and bought 15 September 760 calls for a credit of $.50 ($750). Net credit and profit potential of $1.05 ($1,575). Maximum profit range is 590 to 750.

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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 - 686.27
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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NEXT CPTI SEMINAR!
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 Ft. Lauderdale. 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 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. Our CPTI seminars are limited to ONLY 25 ATTENDEES. 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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