Option Investor
Updates

IT'S TIME FOR A PULLBACK

HAVING TROUBLE PRINTING?
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OK, it's time to head south. I don't mean us. I mean the market. We have watched the market move up for a while now. What goes up, must come down - and it will. But, unfortunately, we don't get to choose when.

One of our RUT Iron Condors has a 770 short call. That gives us about a 37.50 point cushion with three full trading weeks left. We also have an SPX Iron Condor with a short 1365 call. That gives us about a 29.50 cushion - not a lot - especially considering that the S&P is making new 52 week highs.

We just need to stay alert. If we get a lot closer, I'll be posting your exit alternatives. Remember, there's no one exit strategy for everyone. There are a lot of variables. It's always interesting when we get close to a short strike price. It separates the men from the boys. We find out who has the discipline to pull the trigger to GTFO or who is still puffing on that "hopium" - waiting for a reversal.

Here are some words from someone wiser than I am - and he doesn't know either:

"After another upside week, following the late drop the prior week, the market is showing signs of being a bit tired. Just as it showed signs of tiredness last week before it continued right back up this week. Even with the quarter end window dressing bid backing down, the indices refuse to give up gains. Indeed, they refuse to sell back. No market or stock can continually rise; they all have to consolidate at some point. The question is how they do it. Some will thud lower with bigger drops (similar to last Thursday), others will ease back to support, while others do it in place, refusing to give up ground. The list runs from weakest to strongest. Thus far this market refuses to give up gains. Is it really that strong or just foolhardy?"

For Those Who Missed The Nov. CPTI Trade
In case you missed the CPTI trade that was posted the other day, here's an alternative for you to consider.

In some client accounts, I was filled on the RUT Nov. 640/630 bull put spread for a $.55 credit. It looks reasonable and relatively safe. Plus, when the market was a bit higher, I was filled on the 810/820 bear call spread for $.45.

The 640/630 bull put spread seems to still be available (based on Thursday's closing prices), but you may have to wait for the market to move up a bit before enough premium will be available to get filled on the 810/820 bear call spread.

Just be careful and don't get greedy. This will be a supplementary trade. In the future, I will comment on the original November RUT trade posted a few days ago as one of our official CPTI portfolio trades.

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Education
You all know I'm a great believer in education. In the long run, it will save you a fortune. Here are some related quotes I came across.

"If someone is going down the wrong road, he doesn't need motivation to speed him up. What he needs is education to turn him around." -- Jim Rohn

"The great breakthrough in your life comes when you realize that you can learn anything you need to learn to accomplish any goal that you set for yourself. This means there are no limits on what you can be, have, or do." -- Brian Tracy

"Perhaps the most valuable result of all education is the ability to make yourself do the thing you have to do, when it ought to be done, whether you like it or not." -- Thomas Huxley

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TWO SEMINAR DATES - LA (Dec. 2/3) & Ft. LAUDERDALE (Nov. 11/12)
The Fort Lauderdale seminar is filling up nicely - and now, the reservations are coming in for the December Los Angeles seminar.

Don't procrastinate!! Check your schedule and plan to attend - but only IF you want to improve your trading results. Contact me. I will personally call you to go over the details and answer all of your questions.

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OCTOBER CPTI PORTFOLIO POSITIONS
CPTI October Position #1 - RUT - Iron Condor - 732.56
With the RUT at about 708, we sold 20 October RUT 610 puts and bought 20 October RUT 600 puts for a credit of about $.50 ($1,000). Then we sold 15 October RUT 790 calls and bought 15 October RUT 800 calls for a credit of about $.60 ($900). Our total net credit and profit potential is $1.10 ($1,900). Maximum profit range of 610 to 790 -- 180 points!! Maintenance is $20,000 -- IF you have the right broker.

CPTI October Position #2 - SPX - Iron Condor - 1339.15
On 9/7, with the SPX about 1295, we sold 12 October SPX 1210 puts and bought 12 October 1195 puts for a credit of $.80 ($960). Then we sold 12 October SPX 1365 calls and bought 12 October 1380 calls for a credit of $.60 ($720). Our total net credit and profit potential is $1.40 ($1,960). Maximum profit range of 1210 to 1365 - 150 points. Maintenance is $18,000 - IF you have the right broker.

CPTI October Position #3 - RUT - Iron Condor - 732.56
With the RUT at about 707, we sold 15 October RUT 630 puts and bought 15 October RUT 620 puts for a credit of about $.60 ($900). Then we sold 10 October RUT 770 calls and bought 10 October RUT 780 calls for a credit of about $.75 ($750). Our total net credit and profit potential is $1.10 ($1,900). Maximum profit range of 630 to 770 -- 140 points!! Maintenance is $15,000 -- IF you have the right broker.

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ONGOING STRATEGY -- THE 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 August RUT Iron Condor position expired worthless - according to plan. We can now officially add another $2,300 of premium to our cash stash. We have now generated $47,250 ($44,950 + $2,300).

October Zero Plus Position: RUT Iron Condor - 732.56
With the RUT at about 708, we sold 40 October RUT 610 puts and bought 40 October RUT 600 puts for a credit of about $.50 ($2,000). Then we sold 30 October RUT 790 calls and bought 30 October RUT 800 calls for a credit of about $.60 ($1,800). Our total net credit and profit potential is $1.10 ($3,800). Maximum profit range of 610 to 790 -- 180 points!! Maintenance is $40,000 -- IF you have the right broker.


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CPTI SEMINAR SCHEDULE!
NOVEMBER 11/12 - FT. LAUDERDALE
NEW DATE - DECEMBER 2/3 - LOS ANGELES

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!

43 OUT OF 46 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: 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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