Option Investor
Updates

A PROFIT IS A PROFIT “ 44 Out Of 47!!

HAVING TROUBLE PRINTING?
Printer friendly version

A PROFIT IS A PROFIT - 44 Out Of 47!!

"It isn't easy bein' green." Not for Kermit or for us this month. They say that close is only good in horseshoes and hand grenades. Well, we may be able to add "trading" to that list, based on this month's results. It was close, real close. . . and it took almost all Friday before the RUT released the settlement number (770.06) for the October cycle. But when it was all said and done, our RUT 770/780 bear call spread was only in the money by $.06.

Quite a relief for those risk tolerant traders who hung in and were still holding the spread. On Thursday, the RUT had closed at 767.39. Earlier on Friday the SPX came out with one of those curious settlement numbers that happen occasionally. It was actually higher than the high of the trading day. Was that a sign of things to come on the Russell? It was easy to envision one of those outrageous 12 point blips. Forgive my bad pun - but it was unsettling.

We were in the helpless position of having held the position at Thursday's close. We couldn't trade it. We were at the mercy of the RUT settlement gods - who take seemingly forever to calculate the damn thing. They must use an abacus.

When the RUT number was finally released, there was cause for celebration. We initially took in $1,900 on the Iron Condor position. The $.06 in the money meant that we only had to give back $60 of the $1,900 - making our profit on that position a healthy $1,840. Whew!!

So, we were profitable on one of our two RUT Iron Condors - a total of $3,840. And we took a loss on our SPX Iron Condor -- $3,200. Our bottom line for the October cycle was a small, but acceptable $540.

Our ongoing Zero-Plus strategy was 100% profitable (see details below) and now we're in cash and want to find a new position. We're also looking for additional November positions, but the VIX is an anemic 10.63. That means there's very little premium out there.

We're not going to force a position or to compromise the safety of our portfolio. Hopefully, we'll get a pullback. When we do, the volatility (at least some) will increase and premiums will become available, providing us with opportunities.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Quickie A Winner!
We got lucky with our quickie this month. Our 780/790 & 730/740 Iron Condor expired worthless. We took in $1,650 in premium - and got to keep it.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

More Words Of Wisdom, Etc.
"There is no sudden leap to greatness. Your success lies in doing, day by day. Your upward reach comes from working well and carefully." -- Max Steingart

"Expect the best, plan for the worst, and prepare to be surprised." -- Denis Waitley

"If you think education is expensive, try ignorance."

What is the difference between a dog and a fox? About 5 drinks.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

TRACKING CPTI PORTFOLIO RESULTS
We just completed our eleventh month (October) of CPTI tracking year number four. Once again the market had a late up move in the October cycle, but, after all was said and done, we ended up with a profit. We've now been profitable for 44 OUT OF THE LAST 47 months - a record we can be VERY proud of. Our total profit for the 11 months of our fourth tracking year is $38,610 ($38,070 + $540).

RECAP OF OCTOBER POSITIONS
(See Position Details in October Summary Below)
RUT Iron Condor - PROFIT: $1,900
SPX Bull Put Spread - LOSS: $3,200
RUT Iron Condor - PROFIT: $1,840

TOTAL OCTOBER PROFITS: $540
October Settlement Numbers:
SPX - $SET - 1371.12
RUT - $RLS - 770.12

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

ONLY 2 SPOTS LEFT!
There are only two spots left for Ft. Lauderdale. 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. Spots are still available for our December seminar is La-La Land.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

SUMMARY OF OCTOBER CPTI PORTFOLIO POSITIONS
CPTI October Position #1 - RUT - Iron Condor - 762.13
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!! Profit: $1,900

CPTI October Position #2 - SPX - Iron Condor - 1368.60
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. Loss: $3,200.

CPTI October Position #3 - RUT - Iron Condor - 762.13
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!! Profit: $1,840

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

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 October RUT Iron Condor position expired worthless - according to plan. We can now officially add another $3,800 of premium to our cash stash. We have now generated $51,050 ($47,250 + $3,800).

October Zero Plus Position: RUT Iron Condor - 762.13 - PROFIT: $3,800With 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 was 610 to 790 -- 180 points!!

Watch for a new Zero Plus position - COMING SOON!!

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

NOVEMBER CPTI PORTFOLIO POSITIONS
CPTI November Position #1 - RUT - Iron Condor - 762.13
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 - 780.32
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.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

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!

44 OUT OF 47 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, 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?

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

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

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

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
.

Couch Potato Trader Updates Archives