Option Investor
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ADDING UP PROFITS NEVER GETS DULL

HAVING TROUBLE PRINTING?
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A funny thing happened on the way to the bank . . . I felt a bizarre feeling. It was like dij` vu all over again. Seems we've been there before. And we have - month after month after month. In 42 out of the last 45 months CPTI students have taken this trip to the vaults to deposit a pocket full of greenbacks - and it never gets dull. Money can't buy love, but it's the next best thing!

With this month's $5,610 of profits (see summary below), we passed a benchmark. We just surpassed the $150,000 profit mark in our CPTI portfolio since its inception of our tracking portfolio in November, 2002. The actual profit figure on all of our posted trades is now $153,620 (less commissions, of course). If I didn't have a few "human" lapses, it could have been substantially higher. But, what the hell? You can't win them all, and, after all, we're only human. At lease most of us are.

So, I tell them that our three losing months had losses of $4,465, $10,865, and $960. If I'd have stuck to my own trading rules, we could have avoided a majority of those losses.

It's interesting how potential Couch Potato Trader subscribers like to focus on the negative. They want to know what kind of losses were taken in the three losing months. It's understandable, though. Here are people who have likely been trading options for a while - directionally - and lost their family jewels - or at least some of them. They have probably squandered thousands of dollars in search of the Holy Grail or trading. They have typically purchased 3 different CD sets, have 2 data sources loaded on their machine, and have software that produces little red and green arrows going in various directions. And who knows what else they may have tried or promises they've heard? No wonder they're skeptical.

Then, somehow, they stumbled across The Couch Potato Trader. It's a gimmicky name, but it pretty accurately conveys the hands off aspect of what we do. They think, here's this guy who claims to be profitable 42 out of 45 months. How? By trading without picking directions. How can that be? How can they possibly make money consistently with limited risk and such a huge probability of success? What's the catch?

Their skepticism is understandable. I think about it myself from time to time and smile. The answer is simple. There's really nothing new under the sun. We've managed to take a non-directional strategy, massage it a little, combine it with a pound of pure common sense, a sound understanding of how options work, a teaspoon of technical analysis, and three tablespoons of self discipline. It's a recipe for profit. It's not like the syrup they use in Coca Cola. Our ingredients aren't a secret.

It sounds easy, but there's some effort necessary by new subscribers. I'm constantly sent emails asking, "How do you do this?" or "What do you do if that?" I write back that they should take advantage of the last 20 months of archived columns. Read them. There's an abundance of information waiting for them - and a smile or two along the way. Most of their questions will be answered - IF they do their homework.

Many subscribers want to speed up their learning curve, so they decide to attend one of my CPTI seminars. Nothing replaces that one-on-one live instruction. However, many Couch Potato Trader subscribers do their due diligence, send me occasional questions, and develop very good trading skills that have translated, over time, into a steady stream of profits. My hat is off to all of you who are willing to devote the time and effort into learning a valuable skill that will last a lifetime.

At the Couch Potato Trader, I don't make promises, I just provide information and an opportunity to learn. The rest is up to you.

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TRACKING CPTI PORTFOLIO RESULTS
We have just completed our tenth month (August) of CPTI tracking year number four. The market had a late up move in the August cycle, but, it finally settled within our predetermined range. We've now been profitable for 42 OUT OF THE LAST 45 months - a record we can be VERY proud of. Our total profit for the first 10 months of our fourth tracking year is $33,780 ($28,170 + $5,610).

RECAP OF AUGUST POSITIONS
(See Position Details in Summary Below)
SPX Bull Put Spread - PROFIT: $720
RUT Iron Condor - PROFIT: $1,725
SPX Iron Condor - PROFIT: $1,440
RUT Iron Condor - PROFIT: $1,725
TOTAL AUGUST PROFITS: $5,610

Settlement Numbers:
SPX - $SET - 1300.26
RUT - $RLS - 713.66

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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 have finalized 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 all of your questions.

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Car Trouble
A blonde pushes her BMW into a gas station. She tells the mechanic it died.
After he works on it for a few minutes, it is idling smoothly. She asks, "What's the story?"
He replies, "Just crap in the carburetor"
She asks, "How often do I have to do that?"

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SUMMARY OF CPTI AUGUST POSITIONS
CPTI August Position #1 - SPX - Bull Put Spread - 1302.30
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. Profit: $720

CPTI August Position #2 - RUT - Iron Condor - 711.68
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. Profit: $1,725.

CPTI August Position #3 - SPX - Iron Condor - 1302.30
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. Profit: $1,440.

CPTI August Position #4 - RUT Iron Condor - 711.68

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 ($1,725). Maximum profit range is 600 to 740. Maintenance is $15,000 - IF you have the right broker. Profit: $1,725

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SEPTEMBER CPTI PORTFOLIO POSITIONS
CPTI September Position #1 - SPX - Bull Put Spread - 1302.30
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 - 711.68
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. Maintenance is $15,000.

CPTI September Position #3 - RUT - Iron Condor - 711.68
On Thursday, August 17th, with the RUT at about 708, we sold 15 September RUT 640 puts and bought 15 September RUT 630 puts for a credit of $.45 ($675). Then we sold 15 September RUT 760 calls and bought 15 September RUT calls for a credit limit of $.80 ($1,200). Net credit and profit potential of $1.25 ($1,875). Maximum profit range is 640 to 760. Maintenance is $15,000.

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ONGOING STRATEGIES -- Watch For Update
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 - 711.68
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 SUMMER 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!

42 OUT OF 45 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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