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JUST WHEN WE THOUGHT IT WAS SAFE . . .

HAVING TROUBLE PRINTING?
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JUST WHEN WE THOUGHT IT WAS SAFE . . .

At about 3:15 p.m. on Friday, things were looking up. The market had fought its way back and the S&P was only down a point. Then it began. The buyers started their weekend early leaving only the sellers. Forty-five minutes and 22+ S&P points later, it was over. It had to stop. Why? Because the trading day was over. I hate to think what would have happened if the market was open another hour. Don't get too comfortable, though. It's likely going to continue - at least early Monday. Then, it should level off. Maybe the bleeding will stop before we run out of band aids.

At least we were prepared. We were proactive earlier in the day and adjusted our August MID 850/840 bull put spread position. Here's how it played out.

a) We closed out the 20 contract original August MID 850/840 bull put spread for a debit of $2.90 - costing us $5,800.

b) We then sold 30 contracts of the August 820/810 bull put spread for $1.20 - bringing in $3,600 of premium.

c) We were then able to sell 30 of the August MID 920/930 bear call spreads for $.65 - bringing in another $1,950 of premium.

We brought in a total of $5,450 in premium after spending $5,800. That's $350 short. But let us not forget the original $1,000 we took in when we established the original position. That means we are still have about $650 of profit left in this adjusted position.

Now, we have a new Iron Condor position with a maximum profit range of 820 to 920. Check the deltas of the short positions and you'll see about an 86% chance of success on the put side and an 88% chance on the call side. Will it hold us in another downside onslaught? Time will tell.

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NEW September CPTI Position?
After making all these adjustments, there may still be a few of you with some money left to trade. Let me know if you agree with this logic. Look how far the market has already come down. Then, look at our friend the VIX. It closed at 24.17 - a new 52-week high. That translates into premium. There is likely another down session coming - might be Monday morning. The volatility may continue up as well.

If it materializes, then I'll be looking in the neighborhood of the SPX 1300 (or less) to put on a ten point bull put spread. This will potentially be the new Zero Plus strategy.

Word of warning: If you only have a little money left, don't put on any new positions. Keep the powder dry because we might need it if this out of control craziness continues. The maintenance can really add up. Keep that in mind.

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NEW SEMINAR DATE ANNOUNCED

Seattle (Oct. 20th & 21st)
As a result of many emails I received, we will venture to Seattle, WA this fall. The dates are Saturday & Sunday, October 20th & 21st. Seattle is supposed to be a great place to visit. The early bird special for the Seattle seminar is in effect until September 1st. Take advantage and save $100. It's a hell-of-a-deal.

There are three "retake" spots available for the Seattle seminar. These retake spots are free for those who have paid to attend one of my previous seminars and who want to retake the seminar a second time. They're reserved on a first come first serve basis. These spots go fast.

Charlotte (Sept. 22nd & 23rd)
Don't wait to make your reservation. The seats go quickly and you'll want to take advantage of the $100 early bird savings if you complete your reservation before August 15th.

There are two "retake" spots remaining for the Charlotte seminar. These retake spots are free for those who have paid to attend one of my previous seminars and who want to retake the seminar a second time. They're reserved on a first come first serve basis. These spots go fast.

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CURRENT AUGUST CPTI PORTFOLIO POSITIONS
CPTI August Position #1 - RUT - Bull Put Spread - 777.83

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 - 1458.95

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 ($780). Then we sold 12 August 1615 calls and bought 12 August 1630 calls for a credit of $.80 (960). The total net credit of $1.45 and profit potential is $1,740. Maintenance requirement is $18,000.

CPTI August Position #3 - RUT - Bull Put Spread - 777.83

On 7/19, with the RUT at about 851, we sold 20 August RUT 770 puts and bought 20 August RUT 760 puts for a credit of $.45. The credit so far is $.45 ($900). Our maintenance is $20,000. We'll see if it's prudent to put a bear call spread on the topside to complete our Iron Condor.

Adjustment: On 7/26, we closed the original 20-contract bull put spread position and established a 30-contract Iron Condor consisting of the 730/720 bull put spread and the 850/860 bear call spread. Maintenance is now $30,000 and the new maximum profit range is 730 to 850. The profit potential of $900 remains the same.

CPTI August Position #4 - MID - Bull Put Spread

On 7/23, with the MID at 916, we sold 20 August MID 850 puts and bought 20 MID August puts for a credit of $.50 ($1,000). The credit so far is $.50 ($1,000). Our maintenance is $20,000.

Adjustment: On 7/27, we closed the original 20-contract bull put spread position and established a 30-contract Iron Condor consisting of the 820/810 bull put spread and the 920/930 bear call spread. Maintenance is now $30,000 and the new maximum profit range is 820 to 920. The profit potential is now about $600.

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CURRENT SEPTEMBER CPTI PORTFOLIO POSITION

CPTI September Position #1 - RUT - Bull Put Spread - 792.48

On 7/24, with the RUT at 822.70, we sold 20 September RUT 700 puts and then bought 20 September RUT 690 puts for a credit of $.70 ($1,400). Total net credit and profit potential (so far) of about $.70 ($1.40). 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. With the July profits, our new cash total is $55,060 ($52,210 + $2,850).

ZERO PLUS POSITION -

RUT - June Iron Condor - 100% PROFITABLE

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 30 July RUT 900 calls and bought 30 July RUT 910 calls for a credit of about $.40 ($1,200). Total net credit and profit potential of about $.95 ($2,850). We were 100% profitable and pocketed $2,850.

We'll be looking to put on a new Zero Plus position soon.

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CPTI SEMINAR SCHEDULE!

SEPTEMBER 22nd & 23rd - CHARLOTTE, NC

OCTOBER 20TH & 21ST - SEATTLE, WA


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 personally call you with all the pertinent information. The price is a bargain - ONLY $995.00 -- less than the profit from one Iron Condor trade. Take advantage of the "early bird special" and save $100. You'll have a two-day experience that you'll remember, and profit from, for a lifetime. I limit my 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!

52 OUT OF 56 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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