Option Investor
Updates

SEPTEMBER - 100% PROFITABLE

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The words "100% Profitable" has a nice ring to it, don't you think? It sure is nice to be back on the right track. Our September profit of $3,300 isn't going to set the world on fire, but it's quite respectable - especially following the August debacle.

We just wrapped up the Charlotte seminar. I was again blessed with a roomful of bright articulate people. They asked a lot of great questions, were thirsty for knowledge and (most importantly) laughed at all my jokes. Basically, we had a great time - going over a variety of strategies and bouncing around some new ideas. I've been adding new items to every seminar.

I will be announcing a new seminar date soon. Stay tuned . . . Below are two October positions. The OEX Siamese Condor is hypothetical and the MID Bull Put Spread is an official CPTI portfolio position.

NEW HYPOTHETICAL OCTOBER POSITION
Since the September Siamese Condor worked out quite well (a $2,200 profit for non greedy traders), let's toss out another one for your consideration. This is a trade we came up with this weekend at the seminar.

Once again, we're going to use the XEO options (they track the S&P 100 Index). Why not use the OEX options? Because we prefer European style options for this particular strategy. We don't want to risk early assignment.

With the OEX trading at 713.55, we're going to:
Sell 4 October XEO 715 call at about $11.40 ($4,560)
Sell 4 October XEO 715 puts at about $12.70 ($5,080)
Credit of about $24.10 ($9,640)

We will now go far out of the money (OTM) to buy long puts and calls to cover our short positions and turn them into spreads.

Buy 4 October XEO 765 call at about $.15 ($60)
Buy 4 October XEO 665 puts at about $2.90 ($1,160)
Debit of about $3.05 $1,220)

Our net credit is $21.05 ($2,105). Our maintenance is $5,000 per contract x 4 = $20,000.

We have now created a profit range of 693.95 up to 736.05. The closer the OEX closes to our 715 short strikes, the more money we'll make. However, we will make something if the OEX closes within the profit range. Our maximum profit is the $2,105 (don't hold your breath - it's rare). The parameters of our profit range are also our exit points.

We will keep an open mind to exiting the spread early if we have a chance to lock in a nice profit. That's why we were successful with the September Siamese Condor. We exited just before the Fed made their announcement and locked in a profit.

Keep in mind that the prices will likely be quite different when the market opens on Monday These are not optimal for a range-bound strategy, but it should offer us an opportunity for a nice profit. Plus, we may learn a few things along the way.

New CPTI Portfolio Position - MID Bull Put Spread
With the MID trading at 881.85, let's:


Sell 20 October MID 810 put - MLTVB
Buy 20 October MID 800 put - MLTVT
Credit of about $.60 ($1,200)
 

Our net credit of about $.60 ($1,200). The maintenance is $20,000. Our cushion is 71.85. If the market moves up on Monday's open, it's fine to take a credit of $.50.

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TRACKING CPTI PORTFOLIO RESULTS
We've just completed the tenth month (September) of CPTI tracking year number five. The market was all over the place, not necessarily the kind of month good for our strategies. However, our short strikes were well positioned and all of our trades ended up 100% profitable. Our profit for the tenth month of our fifth year was $3,300. Thus far, in our fifth tracking year, we've accumulated a profit of $6,310 ($3,010 + $3,300).

RECAP OF SEPTEMBER POSITIONS
(See Position Details in September Summary Below)

RUT Bull Put Spread - PROFIT: $1,400
SPX Bull Put Spread - PROFIT: $1,000
RUT Iron Condor - PROFIT: $900

TOTAL SEPTEMBER PROFIT: $3,300

September Settlement Numbers:
S&P 500: $SET - 1533.38
Russell: $RLS - 816.81
S&P 100: OEX - 713.35
MID: $MIV - 885.24

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SUMMARY OF SEPTEMBER CPTI PORTFOLIO POSITIONS
CPTI September Position #1 - RUT - Bull Put Spread - 813.11

On 7/24, with the RUT at 822.70, we sold 20 September RUT 700 puts and 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 PROFIT: $1,400.

CPTI September Position #2 - SPX - Bull Put Spread - 1525.75
On 8/3, with the SPX at about 1463, we sold 20 September SPX 1260 puts and bought 20 September 1250 puts for a credit of $.50 ($1,000). PROFIT: $1,000.

CPTI September Position #3 - RUT - Iron Condor - 813.11
(Formerly August Position) 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).

Adjustment: On 7/26, we closed the original 20-contract bull put spread position and established a 30-contract Iron Condor consisting of the 670/660 bull put spread and the 840/850 bear call spread. Maintenance is now $30,000 and the new maximum profit range is 670 to 840. The profit potential of $900 remains the same. PROFIT: $900.

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CURRENT OCTOBER CPTI PORTFOLIO POSITION

CPTI October Position #1 - RUT - Bull Put Spread - 813.11

On 9/7, with the RUT at 775.53, we sold 20 October RUT 630 puts and bought 20 October RUT 620 puts for a credit of $.70 ($1,400). Total net credit and profit potential (so far) of about $.70 ($1,400). Our maintenance is $20,000. We'll look for opportunities to complete our Iron Condor if/when the market pops up.

CPTI October Position #1 - SPX - Bull Put Spread - 1525.75
On 9/20, with the SPX at 1518, we sold 20 October SPX 1395 puts and bought 20 RUT 1385 puts for a credit of $.60 ($1,200). Total net credit and profit potential (so far) of about $1,400. 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 -

Watch for a New Position To Be Announced Soon

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CPTI SEMINAR SCHEDULE!

CHARLOTTE, NC - Another Huge Success!


Take your trading from a "hobby" to a 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 57 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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