Option Investor
Updates

DIPPING OUR TOE INTO DECEMBER

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Today, with the RUT already down over 20 points on the day, the December puts started to look pretty good. I posted our first December position - a 690/680 bull put spread - for a $.70 credit. Then, as if right on cue, the minute I sent out the posting, the market broke lower.

So, I checked out the option chain and sent out another posting. I suggested that traders, who did not enter into the 690/680 bull put spread, look at the 680/670 bull put spread. A short while later, I sent out yet a third, suggesting the 670/660 bull put spread.

Thousands of contracts traded - all over the place. I received emails from different traders who were filled on all three.

Perhaps I was premature in putting on the position. I realized later that December is a five-week option cycle. That means we will wait seven weeks for the December positions to be resolved. However, with the RUT trading at 806, there was a 116 point cushion. That's a 14.4% cushion. Will that last seven weeks? I'd like to think so. According to the delta, there was a 95% chance of success. I'll take that any day. Those who were filled at 680/670 or 670/660 are in even better shape.

November Positions
The market is reacting to what it feels was an insufficient 25-point rate cut. A 362 point loss on the Dow, a 40.94 point loss on the S&P and a 32.84 point RUT loss can be interpreted a few different ways. Is this the first step towards a recession? Or, will the leaders hold on, weather the storm and begin another leg higher? Hell, I don't know. I'll leave the prognostications to the chart readers, the self-proclaimed gurus and the Psychic Friends Network.

With two weeks left to expiration, our November RUT 730/720 bull put spread still has a 65 point cushion. Our November 1425/1415 SPX bull put spread has an 83 point cushion and our November MID 820/810 bull put spread has almost a 78 point cushion. The market can go through these cushions like shit through a goose, but I like our positions. The stocks are on sale. It just depends how large of a discount the bargain hunters are looking for.


Early-Bird Countdown
Only eight more days remain to take advantage of the Early Bird Special for the Los Angeles two-day advanced seminar. Save $100. Contact me today!

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S&P 500 Support & Resistance
Closed at 1508.44
Resistance:
The 50 day EMA at 1518
1523 is the July 2006/March 2007 up trendline
1534 is the early July high
1539 is the mid-June intraday high
1541 is the early June high
1553 intraday high from March 2000 used to be the all-time peak
1556 is the July intraday high
1576 is the October intraday high.

Support:
The 90 day SMA at 1503
1490.72 is the early June closing low and early August peak.
The 200 day SMA at 1481
1475 from peaks in December 1999 and January 2000

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NEW SEMINAR DATE - CHICAGO - JANUARY 26 & 27 - CHICAGO

CPTI SEMINAR - LOS ANGELES - DEC. 8 & 9

I recently asked for suggestions on a Midwest location for the next CPTI seminar. Thanks to the many who replied. Among the suggestions were Salt Lake City, UT, Dayton, Ohio, St. Louis, MO, Toronto, Canada, Chicago, IL (3), Cleveland, OH, Denver, CO.

Chicago seemed like the most centrally located and most accessible location. We've been there twice before and filled the room. Let's give it another shot. I've chosen a hotel near the airport - eliminating the need to rent a car. You'll just take the airport shuttle right to the hotel, convenient and easy. Take advantage of the early bird special and save $100. See the details below.

Join us as we discuss, trade selection, entry points, exist strategies and alternatives, premium negotiation, maintenance alternatives, taxes, and much more - all subjects necessary to enlighten and to maximize your trading business. As you know by now, the seminars typically sell out. As in trading, opportunities aren't there for long. Reserve your spot as soon as possible.

Early Bird Specials - SAVE $100
L.A. - If you complete your registration for the upcoming Los Angeles seminar prior to November 9th, you will save $100. If you've been paying attention to my column, by now you know that every $100 you save is $150 you don't have to make. Plus, it's likely deductible for you.

No more retake spots are available for the Los Angeles seminar. There is now a waiting list for possible cancellations. Contact me if you would like to be on the waiting list. Thus far, there are two people on the waiting list.

Chicago - If you complete your registration for the upcoming Chicago seminar prior to December 14th, you will save $100 only $895 If you've been paying attention to my column, by now you know that every $100 you save is $150 you don't have to make. Plus, it's likely deductible for you.

There are now three retake spots available for the Chicago seminar. These spots go fast. Contact me as soon as possible if you would like to join us.

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CURRENT CPTI NOVEMBER Positions
Position #1 - SPX - Bull Put Spread - 1508.44

On 10/9, with the SPX at 1553.50, we sold 20 November SPX 1425 puts and bought 20 November SPX 1415 puts for a credit of $.50 ($1,000). Maintenance is $20,000. We may put on a bear call spread in the future - IF it makes sense.

CPTI November Position #2 - RUT Bull Put Spread - 795.18
On 10/11, with the RUT at 835, we sold 20 November RUT 740 puts and bought 20 November RUT 730 puts for a credit of $.50 ($1,000). Maintenance is $20,000. We may put on a bear call spread in the future - IF it makes sense.

CPTI November Position #3 - MID Bull Put Spread - 887.81
On 10/16, with the MID at 902, we sold 20 November MID 820 puts and bought 20 November MID 810 puts for a credit of $.50 ($1,000). Maintenance is $20,000. We may put on a bear call spread in the future - IF it makes sense.

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CURRENT CPTI DECEMBER Position
CPTI December Position #1 - RUT Bull Put Spread - 795.18

On 11/1, with the RUT at 806, we sold 20 December RUT 690 puts and bought 20 December RUT 680 puts for a credit of $.70 ($1,400). Maintenance is $20,000. We may put on a bear call spread in the future - IF it makes sense.

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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 -
CPTI Zero-Plus Position #1 - RUT Bull Put Spread - 821.39

On 10/11, with the RUT at 835, we sold 30 November RUT 740 puts and bought 30 November RUT 730 puts for a credit of $.50 ($1,500). Maintenance is $20,000. We may put on a bear call spread in the future - IF it makes sense.

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CPTI SEMINAR SCHEDULE!

LOS ANGELES, CA - DECEMBER 8 & 9

CHICAGO, IL - JANUARY 26 & 27


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 will 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!

54 OUT OF 59 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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