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TIS THE SEASON TO BE JOLLY

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By Mike Parnos

This is truly the season to be jolly. At the Couch Potato Trading Institute, we have a lot to be jolly about. Life is good and life is profitable, but as I hope you realize, life is what you make it. It's the proactive people that make things happen. It's the passive people, who only react, who complain about life and point fingers.

I have received a slew of emails from CPTI students and seminar grads who have done exceptionally well this year. It was the same last year, and the year before that. For me, nothing could be more satisfying. That is the greatest gift I could hope to receive. Through my writing and/or the seminar experience, I've touched lives and changed lives for the better.

For this Christmas, I hope to give you the desire, the motivation and the cojones to act upon it. I wish you, and your families, all an incredibly Safe, Happy, Healthy, and Prosperous Holiday Season.

Will 2007 be a good year? Only if you make good decisions. It's up to you.

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Friday Recap

The volume on Friday was low, but so what? The market came down a bit, a little volatility showed up and, along with it, a little premium. The VIX was up a healthy .86 Friday. It was an opportunity, so we pounced on it. We never know when we might see it again.

As the market retreated, we filled Thursday night's suggested February SPX 1325/1310 bull put spread. Better than that, many CPTI students showed a bit of patience and were able to get the same $.70 premium for both the 1320/1305 and 1315/1300 bull put spreads at different times of the day. A ton of contracts traded at these strikes. They're likely not all our doing, but you can bet we were responsible for a huge chunk of them.

Hat's off to the patient, the cautious and the creative. That's what the CPTI is all about. Learning to take my suggestions, make them better, and adjust them for your own risk tolerance, account size, etc.

We were also able to fill our Zero-Plus trade of 25 contracts of the February 690/680 bull put spreads for $.55. Once again, I received emails from CPTI students who established even safer positions (680/670) taking in $.40.

I'm slowly becoming a believer that we may have topped out. I'm on the verge of putting some bear call spreads on our bull put spreads. Let's hope the volatility sticks around for awhile so we can make February a potentially very profitable month.

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Early Bird Special A Big Hit
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.

So far, many CPTI students have taken advantage of the "Early Bird Special." There are still spots left in both seminars. Don't wait too long. Note to former CPTI seminar graduates: There is only one free retake spot remaining for Dallas and three free retake spots remaining for Washington, DC. He who hesitates . . .

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Ho Ho Ho & Ha Ha Ha
A guy bought his wife a beautiful diamond ring for Christmas.

After hearing about this extravagant gift, a friend of his said, "I thought she wanted one of those sporty four-wheel-drive vehicles."

"She did," he replied. "But where was I going to find a fake Jeep?"

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Christmas Firemen
In a small Southern town there was a "Nativity Scene" that showed great skill and talent had gone into creating it. One small feature bothered me. The three wise men were wearing firemen's helmets. Totally unable to come up with a reason or explanation, I left.

At a "Quick Stop" on the edge of town, I asked the lady behind the counter about the helmets. She exploded into a rage, yelling at me, "You damn Yankees never do read the Bible!" I assured her that I did, but simply couldn't recall anything about firemen in the Bible. She jerked her Bible from behind the counter and ruffled through some pages, and finally jabbed her finger at a passage. Sticking it in my face she said
"See, it says right here -- 'The three wise man came from afar.'"

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CURRENT JANUARY CPTI PORTFOLIO POSITIONS
CPTI January Position #1 - RUT - Bull Put Spread - 780.82
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 - 1410.76
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 - 656.21

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.

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CURRENT FEBRUARY CPTI PORTFOLIO POSITIONS
CPTI February Position #1 - RUT - Bull Put Spread - 780.82
We sold 20 February RUT 690 puts and bought 20 February RUT 680 puts for a credit of $.55 ($1,000). Our net credit and profit potential is $.55 ($1,100). Maintenance is $20,000. If the market stops trending, we'll look for a bear call spread to complete our Iron Condor.

CPTI February Position #1 - SPX - Bull Put Spread - 1410.76
We sold 12 February SPX 1325 puts and bought 12 February SPX 1310 puts for a credit of $.70 ($840). Our net credit and profit potential is $.70 ($840). Maintenance is $18,000. If the market stops trending, we'll look for a bear call spread to complete our Iron Condor.

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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. We have now generated $51,050 ($47,250 $3,800).

NEW ZERO PLUS POSITION -

Zero Plus - February Position - RUT - Bull Put Spread - 780.82
We sold 25 February RUT 690 puts and bought 20 February RUT 680 puts for a credit of $.55 ($1,375). Our net credit and profit potential is $.55 ($1,375). Maintenance is $25,000. If the market stops trending, we'll look for a bear call spread to complete our Iron Condor.

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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 both Dallas and Washington, DC. 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?

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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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