Option Investor
Updates

ANOTHER 100% PROFITABLE MONTH

HAVING TROUBLE PRINTING?
Printer friendly version

The fat lady finally sang, and we came out smelling like a rose. Our 55th profitable month out of 60 yielded $3,000. I was particularly conservative in placing trades this month, only using bull put spreads. Some Couch Potato traders put on some bear call spreads and made out very well. I congratulate them, but I wasn't prepared to take that risk - especially since we had been faked out so often in the past. We had a bit of a scare to the downside, but the market pulled back before our positions were in any serious trouble.

Tracking Year In Review
The November cycle represented the completion of the fifth year that we have been tracking our Couch Potato portfolio. This year was more eventful, to say the least. We actually had two monthly losses this year - rather unusual for our high probability strategies.

Despite these two monthly losses, we still finished the year with over $13,000 in profit. Had I managed the positions a little better, we would have shown more profit. There's always room for improvement. Every challenging month is another learning opportunity - for you and for me.

On a more positive note, in a very high volatility environment, we are now on a new streak of three 100% profitable months in a row. I'm working toward making our sixth year a very profitable year.

New December Trades
Friday's added expiration volatility provided us with an opportunity to enter a new SPX Iron Condor. This time, we put on both sides, the bull put and bear call spreads. We took in a nice net premium of $1.60 on the 10-point spreads.

Our maximum profit range is 250 points - 1320 to 1570. It has to last for five weeks. I like our chances, but strange things happen.

Notice how we're now using only 10-point spreads instead of 15-point spreads on the SPX. I changed the spread size after we learned an expensive lesson in the unfortunate August cycle. Why? Because, if we're faced with having to close out a spread, the long option 15 points away is not going to have much value to help defray the cost of buying back the short option. With a 10-point spread, the long option would retain more value and be a greater help.

Quickie Results
When we're hot, we're hot. This months two Quickie trades both finished 100% positive. Those who dared to participate put about $7,200 in their pockets. That's two months in a row, but don't get too cocky. These Quickie trades are still very risky.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

TRACKING CPTI PORTFOLIO RESULTS
We've just completed the last month (November) of CPTI tracking year number five. Our strikes were well positioned and all of our trades ended up 100% profitable. Our profit for the twelfth month of our fifth year was $3,000. In our fifth tracking year, we accumulated a profit of $13,110 ($10,110 $3,000). Considering the hit we took in August, the yearly results are very respectable.

RECAP OF NOVEMBER POSITIONS
(See Position Details in November Summary Below)

RUT Bull Put Spread - PROFIT: $1,000
SPX Bull Put Spread - PROFIT: $1,000
MID Bull Put Spread - PROFIT: $1,000

TOTAL NOVEMBER PROFIT: $3,000

November Settlement Numbers:
S&P 500: $SET - 1462.47
Russell: $RLS - 769.50
S&P 100: OEX - 680.61
MID: $MIV - 852,27

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Couch Potato Reviews

This is supposed to be a trading column, but you know I take a little poetic license from time to time. Couch Potatoes like movies. They graduate (hopefully) from cartoons to infomercials to CSI shows to Law & Order and finally to movies. There have been a few entertaining movies released in the last few months. The last four or five years have not produced particularly good movies - not like it used to be. I think the movie-going public has lowered the bar a bit. What used to be average, now looks a little better. But, I thought I'd share the names of a few worth efforts.

"Sicko" - Michael Moore's look at the healthcare industry. Eye-opening.

"Talk To Me" - Based on a true story, story of a well known black DJ during the mid-1960s. Good story. Great soundtrack.

"No Country For Old Men" - Has one of the best movie bad guys in years - since Michael Meyers.

"American Gangster" - Denzel Washington & Russell Crowe keep you glued to the screen.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

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.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

SUMMARY OF CPTI NOVEMBER POSITIONS
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. PROFIT: $1,000.

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. PROFIT: $1,000

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. PROFIT: $1,000.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

CPTI DECEMBER POSITIONS
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.

CPTI December Position #2 - SPX Iron Condor - 771.60
On 11/16, with the SPX at about 1450, we sold 20 December SPX 1320 puts and bought 20 December SPX 1310 puts for a credit of $.90 ($1,800). Then we sold 20 December 1570 calls and bought 20 December 1580 calls for a credit of $.70 ($1,400). Total net credit and profit potential of $1.60 ($3,200). Maintenance is $20,000.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

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 ($55,060 + $1,500)

NEW ZERO PLUS POSITION -
Monday, I'm going to try to put on a similar December SPX Iron Condor for our Zero Plus position as we have in our CPTI December portfolio. Refer to the two Friday recommendation posts. A few days have gone by and the premium may be a little smaller, but I'm going to try and be creative.

I'll post an update if/when the Zero Plus strategy is filled. I will probably trade 25-30 contracts.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

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!

55 OUT OF 60 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?

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

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

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

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.

Couch Potato Trader Updates Archives