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GOOD FILLS BY GOOD TRADERS

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The market had a wild day on Friday, but lately that's nothing new. It did give us an opportunity to get the Friday suggested trade filled. The VIX even popped up over 17 for awhile. What's even more interesting is how you all chose to place the trades.

Over 2,000 contracts were traded in each of the August 740 & 730 puts. That's a bunch. I understand that some traders took in as much as $.60 premium. It's encouraging that the CPTI subscribership continues to grow.

I also noticed that there were over 760 contracts of the August 720 put traded - substantially more than trade in a typical trading day. That, along with emails I received, told me that many of you exercised some patience, used some creativity and put on the 730/720 RUT August bull put spread. Then, there was Gregg . . .

Hi Mike -- I just got filled on an August 720-710 RUT spread for .45 cents. Thanks, Greg

Hi Greg - Great trade! Keep up the good work.

This just proves that there really are opportunities for traders to get into even safer trades and still bring in a decent premium. I understand that not everyone has the time to sit at the computer and wait for the pullback before placing his trade. Then again, perhaps Greg put on the trade earlier in the day and it got it filled later on the mid-day spikedown.

So, the market continues to fluctuate, both day-to-day and inter-day. Some believe that it's just part of another basing process - preparing for the next move up. That may well be, but I'm pretty comfortable with the July positions. We have some decent cushions that should withstand another move up.

We've managed to get through the first two weeks of a long five week cycle. Three weeks remain. I like our chances. Also, note that the market will be closed on Wednesday, July 4th and will close early on Tuesday.

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Re: CPTI's June Loss
Mike - Could the loss you took last month have been avoided by rolling the SPX position out to July or August? - Bruce

Hi Bruce - Yes, it's certainly possible that we could have avoided the loss entirely. We could have rolled the June 1535/1550 SPX bear call spread to the July 1545/1560 (or thereabouts). It would have bought us an entire cycle for the SPX to slow down and possibly expire worthless. The only problem is that it would have required increasing the number of contracts traded and, thereby, increasing the risk in the overall position.

That's all well and good if one has a large enough trading account. The size of a trader's account plays a huge part in the amount of flexibility and choices a trader has in adjusting positions.

Some CPTI subscribers do in fact have very large accounts. However, the majority of traders don't have the luxury of being able to keep rolling out a position as many times as it takes until it expires worthless. That's why I chose to close the June SPX position and take the loss. It's what most subscribers would have had to do. Fortunately, many subscribers had already taken the initiative and closed the position, presumably for a smaller loss.

The lesson to be learned from this exercise is to keep your powder dry and don't use your entire account for maintenance. Just because I suggest a certain number of contracts in the posted trades, use common sense and adjust the number to your account size and risk tolerance.

I'm still going to look for a Butterfly Net position for the July cycle. The problem is, I'll have to pick a direction. I'm good at following directions, but I suck at picking a direction. The risk is small and it gives you directional traders out there (and I know you're out there) a way to play the market without risking the family jewels.

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CURRENT JULY CPTI PORTFOLIO POSITIONS

CPTI July Position #1 - SPX - Iron Condor - 1503.35

On 5/30, we sold 15 July SPX 1400 puts and bought 15 July SPX 1385 puts for a credit of $.70 ($1,050). On 6/4 we put on the bear call spread to complete our Iron Condor. We sold 15 July SPX 1625 calls and bought 15 July SPX 1640 calls for a credit of $.70 ($1,050). Our net credit and profit potential is $2,100. Our maintenance is still $22,500.

CPTI July Position #2 - SPX - Iron Condor - 1503.35

On 6/4, with the SPX at about 1536, we sold 12 July SPX 1440 puts and bought 12 July SPX 1425 puts for a credit of $.70. Then we sold 12 July 1625 calls and bought 12 July 1640 calls for a credit of $.70. The total net credit of $1.40 and profit potential is $1,680. Maintenance requirement is $18,000.


CPTI July Position #3 - RUT - Iron Condor - 833.70
On 6/21, with the RUT at 839.81, we sold 20 July RUT 770 puts and then bought 20 July RUT 760 puts for a credit of $.55 ($1,100). Then we sold 20 July RUT 900 calls and bought 20 July RUT 910 calls for a credit of about $.40 ($800). Total net credit and profit potential of about $.95 ($1,900). We have a 130-point maximum profit range- from 770 to 900. Our maintenance is $20,000.

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CURRENT AUGUST CPTI PORTFOLIO POSITIONS
CPTI August Position #1 - RUT - Iron Bull Put Spread - 833.70

On 6/29, with the RUT at 844, we sold 20 August RUT 740 puts and then bought 20 August RUT 730 puts for a credit of $.45 ($900). Total net credit and profit potential of about $.45 ($900). Our maintenance is $20,000. We'll look for opportunities to complete our Iron Condor if/when the market pops up.

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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 $52,210 ($49.610 + $2,500).

ZERO PLUS POSITION -
RUT - Iron Condor - 833.70

On 6/21, with the RUT at 839.81, we sold 30 July RUT 770 puts and then bought 20 July RUT 760 puts for a credit of $.55 ($1,650). Then we sold 20 July RUT 900 calls and bought 20 July RUT 910 calls for a credit of about $.40 ($1,200). Total net credit and profit potential of about $.95 ($2,850). We have a 130-point maximum profit range- from 770 to 900. Our maintenance is $20,000.

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CPTI SEMINAR SCHEDULE!

NEW DATES TO BE ANNOUNCED SOON.
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!

51 OUT OF 55 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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