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ONE DECISION DOWN, ONE TO GO

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On Friday, we bid farewell to our S&P October 1365/1380 bear call spread. We bought back the 1365 call and sold the 1380 call for a credit limit of $4.30. We had 12 contracts. It cost $5,160 ($4.30 x 12 contracts). We had taken in $1,960 on the Iron Condor position. That leaves us with a loss on the total position of $3,200. It could have been a lot worse, but we kept it to a reasonable amount.

Now, no loss is pleasant. However, if you're going to succeed as traders, you have to consider it not as a loss, but as a cost of doing business. We are right about our positions an outrageous percentage of the time.

You've heard me say that we shouldn't take losses personally. We shouldn't consider them failures because they aren't. We're playing in a game that we can't control. The only conscious decisions we can make are when to get in and when to get out of a position.

Some CPTIers got out when we talked about an early exit back on October 5, for about $2,640 ($2.20 x 12 contracts). It proved to be a wise decision. I believed that we should give the market a chance to pull back. It was overdue - and still is. But, it didn't happen. It cost us an additional $560 to let the position run for awhile. It was a matter of personal preference - which is true for all exit positions.

There are some CPTIers who have yet to close out the bear call spread. The SPX is actually only at the 1365 short strike price. Those who are holding on still have about a 50/50 chance of success. It's a more aggressive approach, but one's risk tolerance, personality, and account size all enter into the decision making process.

If you had the full Iron Condor position, the next decision to be made is what to do with the SPX October 1210/1195 bull put spread. Obvious, there is no threat there. It will, undoubtedly, expire worthless. The question is whether or not you need to buy back the 1210 call. It shouldn't cost more than a nickel. Why not just let it expire worthless? Buy closing the short position, you will release the $18,000 in maintenance dollars for use elsewhere.

Your choice will depend on your account size. Do you need those funds to get into another trade? There is still another week to go before expiration. The nickel you spend now will give you the opportunity to take in substantially more than that nickel's worth of premium in a new position - IF you're planning on trading soon. Actually, there's no rush to buy back the 1210 put. Unless there's a dramatic pullback, you should be able to buy it back for the same nickel all next week.

If there is no new position on the horizon for you, or if you don't need the maintenance dollars, you might as well save the $75.00 -- $60.00 premium plus $15 commission ($1.25 x 12 contracts).

What About The RUT?
The same concept applies to the October 770/780 bear call spread on the Russell 2000 Iron Condor. Some CPTI students have bailed. Others are holding on. Again, you have to decide. Based on Friday's closing prices, you can close the position for about $2.95 ($2,950). It's your call.

I'm going to hang on for awhile. That damn pullback is going to happen. It's just a matter of if it happens in time to help save the Condor.

Hmmm. Sounds like a good cause. Maybe Jerry Lewis will do a telethon to "save the Condor." That's a cause I suspect we'd all support.

ONLY TWO SPOTS LEFT!
There are only two spots left for my Ft. Lauderdale seminar. What are you waiting for? Contact me and come experience a weekend you'll never forget. Then, go home with wisdom that will last you a lifetime.

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OCTOBER CPTI PORTFOLIO POSITIONS
CPTI October Position #1 - RUT - Iron Condor - 762.65
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 - 1365.62
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. Closed bear call spread for a loss of $3,200.

CPTI October Position #3 - RUT - Iron Condor - 762.65
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. At that time, $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 dramatically 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 - 762.65
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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NOVEMBER CPTI PORTFOLIO POSITIONS
CPTI November Position #1 - RUT - Iron Condor - 762.65
With the RUT at about 722, we sold 20 November RUT 620 puts and bought 20 November RUT 610 puts for a credit of about $.50 ($1,000). Then we sold 20 October RUT 800 calls and bought 20 October RUT 810 calls for a credit of about $.60 ($1,200). Our total net credit and profit potential is $1.10 ($2,200). Maximum profit range of 620 to 800 -- 180 points!! Maintenance is $20,000 -- IF you have the right broker.

CPTI November Position #2 - MID - Bull Put Spread - 784.65
With the MID at about 755, we sold 20 November MID 690 puts and bought 20 November 680 puts for a credit of $.75. Our potential profit is $1,500. Maintenance is $20,000. I'll keep on the lookout for a safe bear call spread to complete our Iron Condor. However, if I don't find an appropriate bear call spread, I'm perfectly content to sit with this bull put spread to expiration.

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CPTI SEMINAR SCHEDULE!
November 11/12 - Ft. Lauderdale -
2 Spots Left!
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 definitely attend one of my seminars. With what you learn, you'll see a substantial improvement 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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