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100% PROFITABLE -- AGAIN!!

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100% PROFITABLE - AGAIN!!

As usual, this is my favorite column of the month - adding up the profits. It never gets old. The law of averages tells us that, one of these days, we're going to get nailed -- but, it wasn't this month. So let's enjoy it. We showed another impressive profit of $4,680 on our way to our 49th profitable month out of the 52 months we've been tracking our CPTI portfolio.

A Look at April
April is a five week option cycle. We have some solid positions (RUT & SPX Iron Condors) and a few positions that may pose a problem or two (OEX bull put spread and MID Iron Condor).

Why might these positions be an issue? Because the market is in a corrective phase and it may still have another down leg to go before it bottoms, bases, and starts working its way back up. The solid positions (RUT & SPX) have a large enough cushion to withstand another down leg - likely to about the 200 day moving average. The other two may not have sufficient cushion. Although there are some pockets of strength, the overall market internals are a bit weak

What are our alternatives?
1. Roll out our current position to a distant month and buy the time necessary for the index in question to bottom, base and return.

I'm not a big advocate of rolling out positions. It may work under some circumstances, but not in others. There's no guarantee that the index will rebound. The fact is the threatened indexes went a little too far too fast. The source of this problem is that, because of ongoing low volatility and low premiums, we have had to expose ourselves to the market for too long. We can only get away with that for so long before it comes back to bite us in the ass.

I'm also a believer that one shouldn't carry a grudge and turn a position into a vendetta. Just because a position doesn't work, it doesn't mean we have to make the money back in that same index. You don't have to stay in a bad marriage. There are other opportunities out there.

2. GTFO of the current position and then look for an alternative position in another index to bring in premium to help offset the cost of closing out the original position.

Actually, it's better if you do your research on the alternative position early. There may not be one that fits your criteria. You may have to wait a day or two before you find one. Plus, you have to accept the fact that it may take a few months to make back the premium this way, but that's part of the business. Don't take losses personally. They're simply a cost of doing business. So, where would you rather be - right at the short strike price with a 50/50 chance of success? Or in a new position with an 85-90% chance of success?

If your account is large enough and/or you've managed your account properly, you can increase the number of contracts in the new (alternative) position and potentially make the money back a little quicker. With the VIX at 16.79, there's more premium available than we're used to. But, with more contracts, recognize that you will have additional exposure as well. This is a prime example of why you should not have you're entire account tied up in maintenance. That extra cash gives you flexibility to deal with situations (good or bad) as they arise.

3. Hang on for the ride and hope that last week was the bottom and that we'll all live happily ever after.

We're back to puffing on that "hopium" again. As it stands now, we have roughly a 50/50 chance of success on our OEX bull put spread and slightly better than that on the MID Iron Condor. We've been lucky in the past. Will five weeks be long enough for a dip and return on the OEX? Maybe, maybe not. Do you have the stomach for this approach? Some do. Others won't be able to sleep.

I received an email suggesting I have "balls of steel." Well, maybe I clang a little when I walk, but there's a time to hang on and a time to bail out. You gotta' know when to hold 'em and know when to fold 'em. Unfortunately, that's tough to get right all the time -- and it can get expensive when we're wrong.

What will YOU do? The first step is to do the math. A few Sundays ago (March 4), I outlined a method of calculating the cost of closing out a position and an option for rolling it out. If necessary, go back and read it again. You can use that method and then explore available opportunities in other indexes. It will take some work on your part, but if I did it all for you, you wouldn't learn anything.

Do you have an alternative we haven't considered? Send it along. I'd love to hear it. I certainly don't have all the answers, but I do have an open mind.

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TRACKING CPTI PORTFOLIO RESULTS
We've just completed the fourth month (March) of CPTI tracking year number five. The market continued its up move, then tanked close to expiration. But, we were well positioned and still ended up with another nice profit. We've now been profitable for 49 OUT OF THE LAST 52 months - a record we are VERY proud of. Our profit for the fourth month of our fifth year was $4,680. Thus far, in our fifth tracking year, we've accumulated a tidy profit of $14,780 ($10,100 $4,680).

RECAP OF MARCH POSITIONS
(See Position Details in March Summary Below)

RUT Iron Condor - PROFIT: $2,200
SPX Iron Condor - PROFIT: $1,580
OEX Bull Put Spread - PROFIT: $900

TOTAL MARCH PROFITS: $4,680

March Settlement Numbers:
S&P 500: $SET - 1396.12
Russell: $RLS - 783.69
S&P 100: OEX - 633.94
MID: MIV - 828.99

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VEGAS - RESERVE YOUR SPOT TODAY!
My new June Vegas two-day advanced seminar is filling up fast. Traders are taking advantage of the $100 early-bird special and signing up two and three at a time. Washington is sold out. Las Vegas will likely follow suit. Don't be left out. Reserve your spot for the Las Vegas June 2nd & 3rd seminar today!

Join the family of over 300 traders who have attended my two-day advanced seminars and left with the knowledge and skills that can make the difference between occasional success and consistent success.

Sorry, there are no more retake spots remaining for the Las Vegas seminar.

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SUMMARY OF MARCH CPTI PORTFOLIO POSITIONS
CPTI March Position #1 - RUT - Iron Condor - 778.77
We sold 20 March RUT 700 puts and bought 20 March RUT 690 puts for a credit of $.65 ($1,300). Then, on 1/25, we sold 20 March RUT 850 calls and bought 20 RUT 860 calls for a net credit of $.45 ($900). Our net credit and profit potential is $1.10 ($2,200). PROFIT: $2,200.

CPTI March Position #2 - OEX - Bull Put Spread - 633.94

We sold 20 March OEX 620 puts and bought 20 March 610 puts for a credit of $.45 ($900). Maintenance is $20,000. PROFIT: $900.

CPTI March Position #3 - SPX - Iron Condor - 1386.95

We sold 12 March SPX 1335 puts and bought 12 March 1320 puts for a credit of $.65 ($780). Then we sold 10 March 1490 calls and bought 10 March 1505 calls for a credit of $.80 ($800). Total net credit is $1,580. Maintenance is $18,000. PROFIT: $1,580

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CURRENT APRIL CPTI PORTFOLIO POSITIONS
CPTI April Position #1 - RUT - Iron Condor - 778.77
We sold 20 April RUT 720 puts and bought 20 April RUT 710 puts for a credit of $.45 ($900). Then, we sold 20 April RUT 870 calls and bought 20 April 880 calls for a credit of $.50 ($1,000). Our potential profit is $1,900. Maintenance is $20,000 - IF you have the right broker.

CPTI April Position #2 - OEX - Bull Put Spread - 633.94

We sold 20 April OEX 630 puts and bought 20 April OEX 620 puts for a credit of $.45 ($900). Our potential profit is $900. Maintenance is $20,000.

CPTI April Position #3 - MID - Iron Condor - 823.89

We sold 20 April MID 800 puts and bought 20 April MID 790 puts for a credit of $.55 ($1,100). Then, we sold 20 April MID 900 calls and bought 20 April MID 910 calls and were filled at $.65 ($1,300). Our maximum profit range is 800 to 900. Maintenance is $20,000. Our potential profit is now $2,400. It will be great if this one works out.

CPTI April Position #4 - SPX - Iron Condor - 1386.95

We sold 12 April SPX 1315 puts and bought 12 April SPX 1300 puts for a credit of $.65. Then se sold 12 April SPX 1470 calls and bought 12 April SPX 1485 calls for a credit of $.65. Our net credit and profit potential is $1.30 ($1,560). Our total maintenance is $18,000.

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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 $52,425 ($51,050 $1,375).

NEW ZERO PLUS POSITION - SPX Iron Condor - 1386.95

We sold 12 April SPX 1315 puts and bought 12 April SPX 1300 puts for a credit of $.65. Then se sold 18 April SPX 1470 calls and bought 18 April SPX 1485 calls for a credit of $.65. Our net credit and profit potential is $1.30 ($2,340). Our total maintenance is $27,000.

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CPTI SEMINAR SPRING SCHEDULE!
Dallas, TX - March 10 & 11 - SOLD OUT!!

Washington, DC - April 21 & 22 - SOLD OUT!!

Las Vegas, NV - June 2 & 3

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. Send me your phone number. 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!

49 OUT OF 52 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 the hundreds of former CPTI seminar graduates: There are no free retake spots remaining for Dallas or for Washington, DC. He who hesitates . . . is SOL.

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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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