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QUICKIE TIME, IF YOU DARE

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Today the mierde almost hit the fan. It did for some traders who had more aggressive positions than those in our Couch Potato portfolio. The market waffled around in the morning and then, in the afternoon, continued the plunge it started on Wednesday. I started getting some of those "what do I do now?" emails and phone calls. I heard that some traders were starting to bail on their RUT positions.

Then, fate (and some buyers) stepped in late in the afternoon and brought our indexes back up to about even and a bit positive. Is that a sign of things to come? Or is that just putting off a steeper decline for another day? Today Bernanke talked, but didn't make any friends in Congress or on Main Street. It makes you wonder if he's part of the solution or part of the problem.

We have a week left to expiration. It's going to be interesting. With the market coming down in chunks, as it has been recently, we are suffering from one of those Greek tragedies. No, it has nothing to do with little boys. I'm talking about a spiking Vega. It's not something that two Tylenol or two years of therapy can cure. This "vega" (not Susan) is the Greek measurement of how much an option's price changes for an incremental change in volatility.

Basically, it means that when the implied volatility goes up, the vega goes up - and the option premiums increase. It's as if two more weeks of time value was added to each option's premium. If/when we want to close out a position that is being threatened, it's going to cost more - a lot more.

So, for the moment, our positions look OK. But the market has broken lower. Today's rebound hasn't changed that. We'll keep a close eye on them. This might be an opportune time for you to review the closing and rolling out process we have used in the past. They're in the column archives. Check back into the June, July and August columns. There's a lot of good stuff in there. I know that a lot of the more forward thinking astute traders print out the educational columns for future reference.

Unfortunately, it's not easy to access these articles on the OI site. As a reminder, here's how to get at the past columns. Go to the Couch Potato Trader posting page on the OI site. Then, scroll down to the bottom of the page and click on "next." That will bring up another page of columns. Then, repeat the process until you get where you want to go.

It's a bit tedious, but it's worth the effort. As you find all these pearls of wisdom, an ounce of common sense should tell you to copy and paste the pertinent information into a MS Word document and save it. At some point in the future, I hope to announce that OptionInvestor has come up with an easier, more efficient method to store my prose.

IT'S QUICKIE TIME
As usual, let me preface this section by saying that the Quickie trades I suggest every month are very risky. I don't trade these trades myself, nor are they official CPTI positions. Only experienced and skilled traders - with large brokerage accounts and equally large risk tolerance - should attempt these without adult supervision. That being said, let's get to it.

November Quickie #1 - RUT Iron Condor
Sell 20 Nov. RUT 740 puts - RUTWH
Buy 20 Nov. RUT 730 puts - RUTWF
Credit of about $.95 ($1,900)

Sell 20 Nov. RUT 820 calls - RUZKD
Buy 20 Nov. RUT 830 calls - RUZKF
Credit of about $.85 ($1,700)

Total net credit and profit potential of about $1,800 ($3,600). Maximum profit range is 740 to 820. Maintenance is $20,000.

November Quickie #2 - SPX Iron Condor
Sell 20 Nov. SPX 1420 puts - SXZWD
Buy 20 Nov. SPX 1410 puts - SXZWB
Credit of about $1.10 ($2,200)

Sell 20 Nov. SPX 1525 calls - SXMKE
Buy 20 Nov. SPX 1535 calls - SXMKF
Credit of about $.70 ($1,400)

Total net credit and profit potential of about $1,800 ($3,600). Maximum profit range is 1420 to 1525. Maintenance is $20,000.

Keep in mind that the above numbers are based on Thursday's closing numbers. They will very likely be different at Friday's open. Expect volatility. Use your negotiating skills to bring in as much premium as possible. If you aren't sure what to look for, you need to come to one of my two-day advanced seminars.

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SEMINAR DATES -

CHICAGO - JANUARY 26 & 27

LOS ANGELES - DEC. 8 & 9

I recently asked for suggestions on a Midwest location for the next CPTI seminar. Chicago won. Of all the suggestions, Chicago is the most centrally located and most accessible location. We've been there twice before and filled the room. I've chosen a hotel convenient to the airport - eliminating the need to rent a car. You 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.

SAVE $100 - Only 2 Days left for L.A. Early Bird Special

Los Angeles - 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 Position #1 - SPX - Bull Put Spread - 1474.77
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 - 780.90
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 - 873.26
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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CPTI December Position #1 - RUT Bull Put Spread - 780.90

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 - 780.90

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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