Option Investor
Updates

DOWN TO THE SHORT HAIRS - AGAIN

HAVING TROUBLE PRINTING?
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How are you going to sleep tonight? A lot depends on what positions you have in your portfolio. It got a little exciting today when the S&P got all the way down to 1443.49 with about 20 minutes left in the trading day.

In the past weeks we've seen what can happen in the last half hour. It isn't pretty. But, the market managed a mini-bounce into the close - about 7 points worth. The question is - will it be enough to withstand tomorrow morning's Friday settlement.

For those of us in the SPX 1425/1415 bull put spread, we have a little over 26 points to work with. Based on past openings - even the bad ones - we should be OK. But, we haven't heard the fat lady sing just yet.

Then, there are those traders who were more aggressive. The 1430/1420s should be OK too, but there are those at 1450/1440 and 1440/1430. They are playing with fire. They may have taken in some additional premium, but I'd be interested in hearing if they still believe it was worth it.

Our 740/730 Nov. RUT position should be fine with a 31.60 cushion and our Nov. MID 820/810 should also remain profitable with a 34 point cushion. Aggressive traders may have a few nightmares.

Ready To Trade Tomorrow?
Let's assume for the moment that all of our CPTI positions expire worthless - the best case scenario. During Friday's trading, we will have $60,000 in maintenance released and ready for action - IF you have a progressive option-friendly broker.

On Monday, when it looked like the end of the world was coming, we were prepared to roll out our SPX bull put spread position. The December Iron Condor I suggested (1335/1325 & 1550/1560) looks pretty darn good. I know a number of CPTI students took advantage of the opportunity and placed the trade independently of closing out the November position.

As you know, I always like trading on expiration Friday. It can be crazy and give us a leg up on the following month's positions. So, I'll be looking closely at various trade possibilities - primarily in the usual suspects. It could be an interesting day - especially with the high volatility and the large bid/ask spreads. Premium negotiation will be king. If you don't know the process, that's a damn good reason to attend one of my two day seminars. It could mean many thousands of dollars to you.

Quickie Update
The November risk-takers might come out of this cycle with their pockets bulging. Barring an absolutely crazy settlement tomorrow, both Quickie trades should be 100% profitable. That will put about 7,200 double cheeseburgers into their pockets. That's enough to feed a small country and raise its cholesterol at the same time.

S&P 500 Support & Resistance -- Closed at 1451.15
Resistance:
1459 is the February peak
1475 from peaks in December 1999 and January 2000
The 200 day SMA at 1484
1490.72 is the early June closing low and early August peak.
The 90 day SMA at 1499
The 50 day EMA at 1504
1532 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:
1440 - 1437 from January and March peaks
1430 from the August interim lows
1425 is some minor support.
1406 is the August closing low
1375 is the March closing low
1370 is the August intraday low

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SEMINAR DATES -
CHICAGO - JANUARY 26 & 27
LOS ANGELES - DEC. 8 & 9

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.

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.

SAVE $100 - EARLY BIRD SPECIAL
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 is now only one retake spot available for the Chicago seminar. These spots go quickly. 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 - 1451.15
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 - 771.60
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 - 854.00
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 - 771.60
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 - 771.60

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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