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SETTLEMENT CONCERNS? NOT THIS MONTH

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SETTLEMENT CONCERNS? NOT THIS MONTH.

Expiration Friday isn't usually one of my favorite days, but this month is different. Why? None of our positions are in jeopardy. Friday morning settlement? Bring it on. We're going sleep well tonight.

It looks like the market may finally be rolling over. Today's down day may be a precursor of things to come. It may be a test, but there was huge volume.

As you know, Friday is one of my favorite trading days. We're going to be ready to pounce on opportunities to begin our adventure into March. Yes, I know it's a long time - eight weeks to March expiration. But, we don't have much choice - not if we want to keep reasonably safe levels (and we do!).

Then there are the greedy traders. I know you're out there. You figure you'll just wait another week or two, move the strikes 10-15 points closer, take in the same premium. How do I know you're out there? Because I get the panic phone call or email frantically asking, "What do I do now?"

Tomorrow, I'll be looking at the SPX - approximately the 1325 level for our short put in the a bull put spread and the 1500 level for the short call in the bear call spread. I'm keeping an open mind to both 10 and 15 point spreads. With the low volatility, and lack of premium, we'll likely have to use 15 point spreads.

I'll also be looking at the RUT in the area of 680/670, or perhaps lower if the market continues down. If the market pops up, I think it might be only temporary. So, I may look at the 850/860 or higher.

How Are You Fixed For Maintenance Dollars?
If you're going to trade tomorrow, you need some maintenance dollars. If you have the right broker, on Friday, you will have use of your maintenance dollars from both the SPX and RUT January trades. But, don't count your maintenance chickens before they hatch. The OEX won't settle until Friday closing, so you won't have use of those bucks till Monday.

The settlement symbols to watch for are:
S&P 500 - SPX: $SET
Russell 2000 - RUT: $RLS

The SPX settlement number is usually announced late Friday morning. The RUT takes longer. Why so long? Maybe it's calculated by the love child of Barney Fife and Big Bird. I don't know. But, this month, I don't care. We're cool.

Quickie Update
Looks like this month's quickies will work out. Some quickie traders I know wisely closed their positions today and locked in profits. It looks like this month might be profitable for all concerned -- even the dare-devils.

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CURRENT JANUARY CPTI PORTFOLIO POSITIONS
CPTI January Position #1 - RUT - Bull Put Spread - 778.21
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 - 1426.37
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 - 664.04
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 - 778.21
We sold 20 February RUT 690 puts and bought 20 February RUT 680 puts for a credit of $.55 ($1,100). 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 - Iron Condor - 1426.37
We sold 12 February SPX 1325 puts and bought 12 February SPX 1310 puts for a credit of $.70 ($840). On Jan. 8, we also sold 12 February SPX 1475 calls and bought 12 February 1490 SPX calls for a credit of $.75 ($900). Our net credit and profit potential is $1.45 ($1,740). Maintenance is $18,000.

CPTI February Position #3 - OEX - Bull Put Spread - 664.04
We sold 20 February OEX 615 puts and bought 20 February 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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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).

ZERO PLUS POSITION -
Zero Plus - February Position - RUT - Bull Put Spread - 778.21
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

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. 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?

Note to former CPTI seminar graduates: There are NO free retake spots remaining for Dallas and only 1 free retake spots remaining for Washington, DC. He who hesitates . . .

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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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