Option Investor
Updates

IT'S QUICKIE TIME -- AGAIN

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After a welcome 21-point drop in the S&P, I don't think quickies are such a good idea. But, that hasn't stopped quickie traders in the past. So, I'm going to put out a few trade ideas for those who, every month, throw caution (and sometimes their money) to the wind.

Today's move was good news - particularly for our rolled out June SPX position. We need all the cushion we can get. But, don't let the pullback fool you. The market has faked us out before. It's likely a case of money managers looking for a reason to sell and a bit of profit-taking. Is there institutional money waiting to buy the dip? There may be more downside left before they show their hand - and their money. Just be careful.

May Quickie #1 - RUT Iron Condor
With RUT at 818.63, let's:
Sell 20 May RUT 800 puts - RUTQS
Buy 20 May RUT 790 puts - RUTQR
Credit of about $.95 ($1,900)

Sell 20 May RUT 840 calls - RUZEH
Buy 20 May RUT 850 calls - RUZEJ
Credit of about $1.15 ($2,300)

Total net credit and profit potential of $2.10 ($4,200). Maximum profit range is 800 to 840. Maintenance requirement is $20,000.

May Quickie #2 - SPX Iron Condor
With the SPX at 1491.47, let's:
Sell 12 May SPX 1465 puts - SXZQM
Buy 12 May SPX 1450 puts - SXZQJ
Credit of about $1.05 ($1,260)

Sell 12 May SPX 1515 calls - SXMED
Buy 12 May SPX 1530 calls - SXMEG
Credit of about $1.00 ($1,200)

Total net credit and profit potential of $2.05 ($2,460). Maximum profit range is 1465 to 1515. Maintenance requirement is $18,000.

 

I'll say it again. These trades are risky. You better have the skills and the account size to handle them. You need to be able to monitor these trades. They are NOT official CPTI portfolio trades. You better know adjustments and/or when to GTFO if necessary. One thing is for sure, it will be an exciting week.

The market has been moving in chunks - not small bites. Just look at today's 21+ point move. That seems to be happening a lot lately - in both directions. The VIX is at 13.60. It doesn't sound that high, but we're used to the anemic 10-11 point VIX we've lived with for the last year.

If you dare try either of these trades, adjust the number of contracts to your risk tolerance and account size. You also better know how to deal with them if the trades go bad. The potential rewards are impressive, but the exposure is still substantial. Remember the saying, "if you want to soar like an eagle, you're not going to crap like a sparrow."

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NEW CPTI SEMINAR DATE - CHICAGO, July 28th & 29th
By special request, we're coming back to the Windy City. So, clear your schedule and contact me ASAP to reserve your spot. Take advantage of the EARLY BIRD SPECIAL. You'll SAVE $100, f your reservation is completed by June 15th.

I'm arranging a tour of the Chicago Board Of Options Exchange (CBOE) for attendees on the Friday prior to the seminar for those who can make it. Have you ever wondered how our orders are processed? Where do they go? How does the system work? Here's your chance to find out first hand.

There is still one spot remaining for my June 2nd & 3rd Las Vegas seminar. It's always a great time in Vegas and a great learning experience. Don't wait too long. This spot will be gone soon.

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CURRENT MAY CPTI PORTFOLIO POSITIONS
CPTI May Position #1 - RUT - Iron Condor - 818.63

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.

CPTI May Position #2 - OEX - Bull Put Spread - 683.73

We sold 20 May OEX 615 puts and bought 20 May OEX 605 puts for a credit of $.45 ($900). Our potential profit is $900. Maintenance is $20,000.

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CURRENT JUNE CPTI PORTFOLIO POSITIONS

CPTI June Position #1 - RUT - Bull Put Spread - 818.63

On 5/1, we sold 20 May RUT 720 puts and bought 20 May RUT 710 puts for a credit of $.50 ($1,000). Maintenance is $20,000. We will watch for an opportunity to add a bear call spread to this position to complete our Iron Condor.


CPTI June Position #2 - SPX - Iron Condor - 1491.47

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 was $1.40 ($1,680). Our maximum profit range is 1300 to 1505. Our total maintenance was $18,000.

On 5/3, with the SPX at about 1501, we rolled out our May position into June by buying back both spreads and establishing the 1535/1550 bear call spread and the 1410/1395 bull put spread for an additional credit of $380. We now have a profit potential of $2,060. Our maintenance is now $27,000. Our max profit range is now 1410 to 1535.

CPTI June Position #3 - RUT - Iron Condor - 818.63

On 5/7, we sold 20 June RUT 760 puts and bought 20 June RUT 750 puts for a credit of $.60 ($1,200). Then we sold 14 June 890 calls and bought 14 June 900 calls for a credit of $.50 ($700). Total potential profit is $1,900. Maximum profit range is 760 to 890. 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. Our new cash total is $49,610 ($51,050 - $1,440).

RUT Iron Condor - 818.63

On 5/7, we sold 25 June RUT 760 puts and bought 25 June RUT 750 puts for a credit of $.60 ($1,500). Then we sold 20 June 890 calls and bought 20 June 900 calls for a credit of $.50 ($1,000). Total potential profit is $2,500. Maximum profit range is 760 to 890. Maintenance is $25,000.

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CPTI SEMINAR SCHEDULE!
Las Vegas, NV - June 2nd & 3rd - ONE SPOT LEFT!

Chicago, IL - July 28th & 29th

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!

50 OUT OF 53 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 Trader 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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