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ABOUT FILLING THE SPX IRON CONDOR

HAVING TROUBLE PRINTING?
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On Tuesday, a shortened trading day, I found an interesting August position - the August 1400/1385 and 1615/1630 SPX Iron Condor. I suggested the trade at $1.45. As usual, the fills ranged from $1.35 to $1.60.

Personally, in some accounts, I was filled at $1.45. In two others I and got $1.60. What was the difference? Well, the $1.45 fills came on trades I put on as a single trade. In other words, I was able to place a single order that included both the bull put spread and the bear call spread for a net credit limit.

In the other accounts I decided to split the spreads. I put the spreads on separately. When the market dipped, I put on the 1400/1385 bull put spread and managed to squeeze out $.90. When the market rebounded, towards the end of the day, I was filled at $.70 on the 1615/1630 bear call spread. However, there is some risk involved in putting the spreads on separately. The market might have just continued down after the bull put spread was filled, thereby not giving the opportunity to get a decent fill on the bear call spread.

Also, this type of trading requires patience. It was plenty tempting just to complete the Iron Condor with a $.55 fill on the bear call spread. Then, again at $.60 and also at $.65. But, I threw out the order at the credit limit of $.70 and, after an hour and a half, it was taken. I was filled on over 120 contracts.

I often get a question on whether a large option order is treated any differently than a smaller order. Honestly, I don't believe it is. If the market makers can take your order and lay it off somewhere and make a profit, the number of contracts doesn't matter. If the numbers work for the market makes, they'll take anything you have to offer.

In Tuesday's trade, some traders were even more patient than I was. I heard about a few who were filled at $.65 for the 1385/1370 bull put spread. I don't know if they managed to get their bear call spread filled, but they did get that extra 15 points of safety on the bull put spread. That's impressive. Besides, there's a good chance the market will continue up to give them a chance to fill the topside.

Tomorrow morning (Friday) there will be a jobs report before the open. Those numbers will likely dictate the market direction for the day. Plus, earnings will start up next week and traders will begin placing their bets. There haven't been a lot of earnings warnings so far, so that may mean earnings may be positive. But, as we know, earnings are always a crapshoot.

As they said on Hillstreet Blues, "Be careful out there."

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S&P 500 Support & Resistance -- Closed at 1525.40
Resistance:
1525 is the late November to February up trendline
1528 is the March 2000 closing high
1541 is the June high.
1553 intraday high from March 2000 is the all-time index peak
The upper trend-line of the channel at 1559

Support:
The 50 day SMA at 1512
The 50 day EMA at 1503
1490.72 is the early June closing low
1475 from peaks in December 1999 and January 2000
1461.57 is the February 2007 high.
1440 is the mid-January high

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TRIED AND TRUSTED EMPLOYEES

A wealthy investor walked into a bank and said to the bank manager, "I would like to speak with Mr. Reginald Jones, who I understand is a tried and trusted employee of yours."

The banker said, "Yes he certainly was trusted. And he will be tried as soon as we catch him."

(a damn good reason not to trade individual stocks)

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CURRENT JULY CPTI PORTFOLIO POSITIONS

CPTI July Position #1 - SPX - Iron Condor - 1525.40

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 - 1525.40

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 - 850.13
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 - Bull Put Spread - 850.13

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.

CPTI August Position #2 - SPX - Iron Condor - 1525.40

On 7/3, with the SPX at about 1524.50, we sold 12 August SPX 1400 puts and bought 12 August SPX 1385 puts for a credit of $.65. Then we sold 12 August 1615 calls and bought 12 August 1630 calls for a credit of $.80. The total net credit of $1.45 and profit potential is $1,740. Maintenance requirement 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. Our new cash total is $52,210 ($49.610 + $2,500).

ZERO PLUS POSITION -

RUT - Iron Condor - 850.13

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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