Option Investor
Updates

46 OUT OF 49. MEET ME AT THE BANK

HAVING TROUBLE PRINTING?
Printer friendly version

46 OUT OF 49. MEET ME AT THE BANK

Again, my favorite column of the month. Chalk up another 100% profitable month. That makes it 46 out of 49 months we have finished in the black. I know many of you have been right there with me enjoying the ride. I just checked the records. We haven't had a losing month since August 2006 - and that was only for $960.

Since we started this insanity back in late 2002, our posted CPTI portfolio has generated about $164.850. That's pretty impressive considering that the last few years we've been stuck in a low volatility/low premium environment. We've also done this in a market that has been trending (up) since early 2003. Also, note that we have neither compounded our profits nor have we significantly increased the number of contracts we trade. The numbers could have been astronomical. Plus, the numbers would have been better by many thousands of dollars if I didn't make a few stupid mistakes along the way. But, I'm only human.

I mention the yearly and four-year totals because, at my seminars, I rant about how traders should take a macro look at their results - not a micro look. See how you've doing over a year's time, perhaps two years. With our strategies, over the long haul, experienced traders should have a nice profit to show for their efforts.

You're going to have occasional losses. It's inevitable. It's part of doing business, like any other business expense. This assumes, of course, you know how to conduct business - or, in our case, have learned your trade, developed trading skills and the necessary self-discipline. You can't take losses as a personal failure.

There is an exception -- if you screwed it up yourself. Then, you definitely need to take responsibility and you damn well better learn from it - or you're doomed to repeat it. You can't keep your head where the sun don't shine and expect to be successful. You have to pull it out and see the light. You can't trade in the dark.

Last year, I had a seminar student claim, during our Traders Anonymous segment, that he had lost $2.8 million in the past two years. When we all recovered from the initial shock, I had to ask him a question. Now, you all know me. I'm not always the most tactful guy in the world. I looked him in the eye and asked, "When did it dawn on you that you don't know what the hell you are doing? After the first $500,000? What about when you passed the million dollar mark, did an alarm go off? Or the two-million dollar mark?

It was pretty much a rhetorical question. Obviously, that alarm never went off? I suspect the alarm was in the shop for repair, out to lunch, at the very least, the battery was dead. When someone is so far out of control, we're talking the "A" word - ADDICT.

There is a cure, we've proven it. But you have to want to be cured. The old adage is true, "you can lead a horse to water, but . . . " The next two interventions are in Dallas and Washington DC. There'll be plenty of water there. Will you be there?

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

TRACKING CPTI PORTFOLIO RESULTS
We've just completed the first month (December) of CPTI tracking year number five. Once again, the market continued its up move, but, after all was said and done, we ended up with a nice profit. We've now been profitable for 46 OUT OF THE LAST 49 months - a record we can be VERY proud of. Our total profit for fourth tracking year was $41,910. Our profit for the first month of our fifth year was $3,100. A good start.

RECAP OF NOVEMBER POSITIONS
(See Position Details in December Summary Below)
RUT Iron Condor - PROFIT: $2,100
RUT Bull Put Spread - PROFIT: $1,000
TOTAL DECEMBER PROFITS: $3,100

December Settlement Numbers:
S&P 500: $SET - 1428.74
Russell: $RLS - 796.08
S&P 100: OEX - 663.11
MID: MIV - 819.92

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

SFO Article
Thanks to those who have written to me about my article in the December issue of SFO Magazine (Stocks, Futures & Options Magazine). This was my fourth article in SFO. But, this one was different. Why? They have a new editor - one with an open mind and a sense of humor. Bless her heart. She didn't edit my article at all. She even left in a "GTF" - and, yes, she knows what it stands for.

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

Dallas & Washington, DC -- Here We Come
Many thanks to all of you who sent me your preferences for the location of our April seminar. Washington, DC was the clear winner. So, I just finalized the details for the Washington seminar. We're ready to rock n' roll.

A date change was necessary. My brain must have taken the day off when I originally picked April 7/8. That is Easter weekend and I know many CPTI students have obligations to go on Easter egg hunts, devour ham, and tolerate a roomful of relatives.

So, the dates have been changed to protect the innocent and obligated. We'll be holding the seminar in Washington, DC on April 21st & 22nd. Now, all you accountants out there have no excuse not to attend.

Give Yourself An Early Xmas Present - At A Discount
For traders interested in attending both the Dallas seminar on March 10th & 11th or Washington, DC seminar, I offer you an "Early Bird Special." If you reserve your spot prior to January 15th, you will SAVE $100. Give yourself a Christmas present. You deserve it. If you don't deserve it, give it to someone who does.

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

SUMMARY OF DECEMBER CPTI PORTFOLIO POSITIONS
CPTI December Position #1 - RUT - Iron Condor - 792.71
With the RUT at about 760, we sold 20 December RUT 680 puts and bought 20 December RUT 670 puts for a credit of about $.45 ($900). Then we sold 20 December RUT 830 calls and bought 20 December RUT 840 calls for a credit of about $.60 ($1,200). Our total net credit and profit potential is $1.05 ($2,100). PROFIT: $2,100

CPTI December Position #2 - RUT - Bull Put Spread - 792.71
We sold 20 December RUT 730 puts and bought 20 December RUT 720 puts for a credit of $.50 ($1,000). Our net credit and profit potential is $.50 ($1,000). Maintenance is $20,000. We'll look for a bear call spread, but don't hold your breath. With the market trending up, we're probably going to be satisfied with the bull put spread. PROFIT: $1,000.

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

CURRENT JANUARY CPTI PORTFOLIO POSITION
CPTI January Position #1 - RUT - Bull Put Spread - 792.71
We sold 20 January RUT 690 puts and bought 20 January RUT 680 puts for a credit of $.50 ($1,000). Our net credit and profit potential is $.50 ($1,000). Maintenance is $20,000. If the market stops trending, we'll look for a bear call spread to complete our Iron Condor.

CPTI January Position #2 - SPX - Iron Condor - 1427,09
We sold 12 January SPX 1300 puts and bought 12 January SPX 1285 puts for a credit of $.70 ($840). Our net credit is $.70 ($840). We also sold 12 SPX January 1470 calls and bought 12 SPX January 1485 calls for a credit of $.60 ($720). Total net credit and profit potential of $1.30 ($1,560). Maintenance is $18,000. Maximum profit range is 1300 to 1470.

CPTI January Position #3 - OEX - Bull Put Spread - 663.11
We sold 20 January OEX 615 puts and bought 20 January 605 puts for a credit of $.40 ($800). Maintenance is $20,000. We'll keep watch for an appropriate bear call spread to complete our potential Iron Condor.

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

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. We have now generated $51,050 ($47,250 + $3,800).
New Zero Plus Position: To Be Announced

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

CPTI SEMINAR SCHEDULE!
Dallas, TX - March 10 & 11
Washington, DC - April 21 & 22

If you really want to take your trading from a "hobby" to a potentially profitable "business," you need 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 - 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 Los Angeles. Contact me and I'll personally 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!

46 OUT OF 49 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