Option Investor
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A SIAMESE, IF YOU PLEASE

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It's been a while since we experimented with other strategies. The saying, "if it ain't broke, don't fix it," certainly applies. But, just to remind the trading world that we're not just a one trick pony, it's time to dig into our bag of strategies and see what we can find. Therefore, by request, we are revisiting an old friend - the Siamese Condor.

I wrote, at length, about the Siamese Condor in the October 17th, 2005 column. Go back and read it. Make sure you understand the strategy completely before you consider placing a trade using real money. That is true with ANY strategy.

This Siamese Condor below is NOT an official CPTI portfolio trade. However, we'll keep an eye on it over the next few weeks. When putting on real trades, always double check the option symbols before placing your trades.

Sell 4 April XEO 660 calls - XEODL
Buy 4 April XEO 695 calls - XEODS
Credit of about $4.80 ($1,920)

Sell 4 April XEO 660 puts - XEOPL
Buy 4 April XEO 625 puts - XEOPE
Credit of about $4.60 ($1,840)

Total net credit of $9.40 per contract ($940 x 4 = $3,760). The profit range is 650.60 to 669.40. The closer XEO finishes to the 660 midpoint, the more profit will be made. The maintenance is $3,500 per contract ($14,000). The exit points for this strategy are the same as the profit range parameters. If it hits either of those points, it's time to GTFO.

If you want to put on a similar trade with a slightly bullish bias, you could use the 665s as the midpoints and buy the 700 calls and 630 puts to complete the Condor. The credit might end up being a bit less, but there would still be plenty of profit potential. The same holds true if you have a bearish bias - simply use the 655s as the midpoint and change the long puts and calls accordingly.

Considering how volatile the markets have been lately, I would watch for, and welcome, an opportunity to close the position if I could lock in a profit of $3.00 to $4.00. If you've earned a reasonable profit on this (or any) positions, it doesn't make sense to risk profit for a few additional dollars.

Also, remember that these prices are based on Thursday's closing prices. There will, obviously, be three days of premium erosion that will affect the prices come Monday morning. Also, keep in mind that the Siamese Condor strategy is best used in a range-bound market. This market environment is not ideal for using this strategy. The above example is for educational purposes - so, when the right opportunity presents itself, you'll (hopefully) be ready.

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ONLY 2 DAYS REMAIN FOR EARLY-BIRD SPECIAL FOR VEGAS SEMINAR.
The June 2 & 3 Las Vegas two-day advanced seminar is filling up fast. There are only four spots remaining. Las Vegas will likely sell out soon. Don't be left out. Reserve your spot for the Las Vegas June 2nd & 3rd seminar today! Traders are taking advantage of the $100 early-bird special. April 10th is the cutoff date to qualify for the early-bird special.

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.

Due to a cancellation, one spot has become available for the Washington DC seminar on April 21st & 22nd. If you're interested, let me know as soon as possible.

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CURRENT APRIL CPTI PORTFOLIO POSITIONS
CPTI April Position #1 - RUT - Iron Condor - 813.35
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 - 659.73

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 - 861.79

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 - 1443.76

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 - 1443.76

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.

CPTI May Position #2 - RUT - Iron Condor - 813.35

We sold 20 May RUT 710 puts and bought 20 May RUT 700 puts for a credit of $.45 ($900). Then, we sold 20 May RUT 870 calls and bought 20 May 880 calls for a credit of $.60 ($1,200). Our potential profit is $2,100. Maintenance is $20,000.

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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 - 1443.76

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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