Option Investor
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THE UNENDING ROLLERCOASTER RIDE

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It's been an interesting week. On Sunday, it looked like the market was heading up - and poised to threaten a few of our April MID and SPX bear call spreads. Just like the market over-reacted up last week to some Fed gibberish, it over-reacted down to some B.S. economic indicators. The result was a bit positive for us - providing a little additional cushion for our positions. We have slightly more than three weeks left to April expiration.

Volatility - Positives & Negatives
When the market moves down, the volatility moves up. In one respect, the added volatility results in additional premium. That extra premium allowed us to put on an extra-safe new position for May (see below). That's a positive.

However, the additional premium tends to stick around a little longer than it used to when the VIX was around 10? In recent option cycles, we could start to look for opportunities to close out positions for a nickel or a dime relatively early in the cycle. We would often be able to close out some positions, and lock in 90% of the profit, with almost two weeks remaining.

With the VIX over 15, we will have to be more patient. Those closeout opportunities will probably come closer to expiration. The premium remains and you may also notice slightly larger bid/ask spreads.

Too Early For May Positions?
I don't think so. On Wednesday, the spike down begat premium. The premium begat opportunity. And the opportunity begat safety. I like that kind of begatting. Because when we have all that begatting, we be-getting a nice profit wrapped up with a bow of a huge profit range and accompanied by weeks of sound sleep.

Apparently, I wasn't the only one who liked the position. The volume on the 1505/1520 SPX options told us that over 2,000 contracts were traded on Wednesday - and another 500 traded today. Obviously, our subscribers were out in force, putting on the May SPX Iron Condor consisting of the 1300/1285 bull put spread and 1505/1520 bear call spread. That's a 205-point maximum profit range. It doesn't get much better than that. There are no guarantees, but some trades provide more peace of mind than others.

I put the trade out for a credit limit of $1.40 - which would be a healthy 10.3% return on the dollars at risk. It reminds me of the good old days (a few years ago) - when we were able to put on both sides of an Iron Condor and when we could take in a comfortable amount of premium.

Some traders were filled at as high as $1.60 - others at $1.50. They likely put on one spread and waited for market movement to put on the other. It's a calculated risk, but the way the market has been bouncing around, for some, it's a risk that was worth taking.

Calculating The Return
Just as a reminder, here's how to calculate the return on your dollars at risk. In our example above, our 12 SPX contract Iron Condor position has a maintenance requirement of $18,000. We took in $1,680 in premium. So, the actual dollars that are at risk are $16,320.

To calculate the return, you simply divide the profit ($1,680) by the dollars at risk ($16,320). That's an impressive 10.294% return. Good stuff.

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VEGAS - ONLY FOUR SPOTS LEFT!
The June Las 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. There are only seven spots remaining. 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 our 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. BTW - Sorry, there are no more retake spots remaining for the Las Vegas seminar.

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CURRENT APRIL CPTI PORTFOLIO POSITIONS
CPTI April Position #1 - RUT - Iron Condor - 798.94
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 - 650.93

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 - 847.45

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.

CPTI April Position #4 - SPX - Iron Condor - 1422.53

We sold 12 April SPX 1315 puts and bought 12 April SPX 1300 puts for a credit of $.65. Then we 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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CURRENT MAY CPTI PORTFOLIO POSITIONS
CPTI May Position #1 - SPX - Iron Condor - 1422.53

On 3/28, with the SPX at about 1419, we sold 12 May SPX 1300 puts and bought 12 May SPX 1285 puts for a credit of $.70. Then we sold 12 May SPX 1505 calls and bought 12 May SPX 1520 calls for a credit of $.70. Our net credit and profit potential is $1.40 ($1,680). Our maximum profit range is 1300 to 1505. 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 - 1422.53

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 SCHEDULE!
Las Vegas, NV - June 2 & 3

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

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 to 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, 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. You'll have a two-day experience that you'll remember, and profit from, for a lifetime. I limit our CPTI seminars to ONLY 25 ATTENDEES. And, as a bonus, 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. 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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