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IT’S OFFICIAL: 56 OUT OF 61!! - PLUS NEW SEMINAR DATE

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IT'S OFFICIAL: 56 OUT OF 61!! - PLUS NEW SEMINAR DATE

What a nice Christmas present! And, also, a nice way to begin the sixth year of tracking the CPTI portfolio with a $4,600 profit. Plus, we're beginning the new year by announcing another seminar date - March 15 & 16 in New Jersey. More about that later.

The December cycle was full of large daily market moves, but, fortunately, they were in both directions and ultimately negated themselves. Our positions were never really threatened and we slept very well all month long. I opted for safety this month. We could have put on a bear call spread on our RUT position, but I chose not to do so. Many CPTI traders did and made out just fine. Again, it's an individual decision -- a matter of risk tolerance, account size, etc.

This months's Friday settlement resulted in big moves, much larger than average, on all the indexes we follow. Fortunately, we were a very safe distance and the settlement had no effect on our results. Here's how they broke down

Index Thursday's Close Friday's Settlement Change
RUT 767.54 781.77 14.23
SPX 1460.12 1474.95 14.83
MID 856.21 866.93 10.72
OEX 682.72 693.57 10.65

Those numbers are pretty big. I bring that up because I'm often asked the question of when to get out of a short position at, or near, Thursday's close. That the one drawbacks of trading the European style options. Once Thursday's trading ends, we can't make any adjustments to our positions between Thursday's close and Friday's settlement number. It's a helpless feeling. News comes out after the market closes or before the market opens. It can be good or bad news, but it can be market moving. We're totally exposed. It's like standing out in the elements in our birthday suits from 4 p.m. on Thursday until 9:30 Friday morning. A lot can happen - and not much of it good. We could end up with sunburn -- or frostbite - or anything in between. The family jewels are anything but safe.

So, the question is: How much of cushion is safe? The average move, up or down, is about 7-8 points. But averages are made up of highs and lows. Many traders choose to roll the dice and let the market determine their fate. After all, you've waited anywhere from four to six weeks for maybe $.60. It might cost you that much, or even a bit more, to close out the position prior to Thursday's close. It's awfully tempting to just hang on, but, as you can see, it can be dangerous.

Those who haven't been exposed to our style of trading have the same question. How can there be any value to an option that is no longer being traded? Normally, if you are short a call that is $5.00 out of the money on Thursday, there would be no time value remaining. It has all eroded away, right? Wrong. But, we're dealing with Eurpoean style options and the rules are different.

The fact that the option is exposed to the market news (as discussed above) means there's still a degree of uncertainty. That uncertainty translates into premium. Until that uncertainty is resolved, premium will remain in the option. So, a trader has to make the choice - buy back the option or let it ride.

The safest choice is to buy it back and not risk it. But, more often than not, traders take the risk. Then, when they get burned, I get emails. Remember, take responsibility for your actions. Tom Hanks said, "There's no crying in baseball." Well, there's no crying in options trading. If you're going to cry, don't do it in public.

Do I expect traders to do the sensible thing? Not really. The smart ones do. The others let the advice go in one ear and out the other - demonstrating that there is no grey matter in there to hold the information. I tell people that stock ownership is dangerous. Also, when I point out the dangers and foolishness of covered call trading, it often gets ignored. But, that doesn't stop me from teaching the sensible and low risk approaches to trading. I guess I'm just stubborn and believe that the educated trader will ultimately prevail. I've seen it happen.

NEW SEMINAR DATE - MARCH 15/16 - NEWARK, NEW JERSEY
Based on your calls and emails, I will be presenting a two-day advanced CPTI seminar in New Jersey (Newark) on Saturday & Sunday, March 15th & 16th. Contact me (Contact Support) and get your spot reserved - and save $100! (See below for early bird special information).

Join us as we discuss non-directional strategies, trade selection, entry points, exit alternatives, premium negotiation, maintenance alternatives, taxes, and much more - all subjects necessary to enlighten and to maximize your trading business. Don't procrastinate. As you know by now, the seminars usually sell out.

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TRACKING CPTI PORTFOLIO RESULTS
Welcome to CPTI portfolio's year number 6! We've just completed the first month (December) of CPTI tracking year number six. Our strikes were well positioned and all of our trades ended up 100% profitable. Our profit for the first month of our sixth year was $4,600. In our sixth tracking year, we accumulated a profit of $4,600. Considering the hit we took in August, the yearly results are very respectable.

RECAP OF DECEMBER POSITIONS
(See Position Details in December Summary Below)

RUT Bull Put Spread - PROFIT: $1,000
SPX Iron Condor - PROFIT: $1,000
TOTAL NOVEMBER PROFIT: $3,000

December Settlement Numbers:
S&P 500: $SET - 1484.46
Russell: $RLS - 781.77
S&P 100: OEX - 693.57
MID: $MIV - 869.54

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SEMINAR DATES -

CHICAGO, IL - JANUARY 26 & 27

NEWARK, NJ - MARCH 15 & 16 (NEW)

The Chicago seminar is filling up nicely. We filled the room twice before in Chicago. I've chosen a hotel convenient to the airport - eliminating the need to rent a car. You simply take the free airport shuttle to and from the hotel -- convenient and easy. The same is true for the newly announced Newark seminar.

Newark Early Bird Special

Take advantage of the early bird special for the New Jersey seminar and save $100. If you complete your reservation by January 31st, you will save $100. My seminar will then cost only $895 (instead of $995).

There are no more retake spots available for the Chicago seminar. If you want to be on the retake waiting list for Chicago, contact me as soon as possible (mparnos@optioninvestor.com).

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SUMMARY OF CPTI DECEMBER POSITIONS
CPTI December Position #1 - RUT Bull Put Spread - 785.60

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. PROFIT: $1,400.

CPTI December Position #2 - SPX Iron Condor - 1484.46
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. PROFIT: $3,200

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CPTI JANUARY POSITIONS
CPTI January Position #1 - RUT Bull Put Spread - 785.60

On 12/4, with the RUT at 752, we sold 20 January RUT 620 puts and bought 20 January RUT 610 puts for a credit of $.60 ($1,200). Maintenance is $20,000. We may put on a bear call spread in the future - IF it makes sense.

CPTI January Position #2 - SPX Iron Condor - 1484.46
On 12/10, with the SPX fluctuating, we sold 20 January SPX 1340 puts and bought 20 January SPX 1330 puts for a credit of $.60 ($1,200). Then, we sold 20 January SPX 1630 calls and bought 20 January SPX calls for a credit of $.55 ($1,100). Net potential profit is $2,300. Maintenance is $20,000.

CPTI January Position #3 - SPX Bull Put Spread - 1484.46
On 12/13, with the SPX at 1472, we sold 20 January SPX 1330 puts and bought 20 January SPX 1320 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 $56,560 ($55,060 $1,500).

ZERO PLUS POSITION - SPX Bull Put Spread - 1484.46

On 12/13, with the SPX at 1472, we sold 30 January SPX 1330 puts and bought 30 January SPX 1320 puts for a credit of $.70 ($2,100). Maintenance is $30,000. We may put on a bear call spread in the future - IF it makes sense.

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CPTI SEMINAR SCHEDULE!

CHICAGO, IL - JANUARY 26 & 27

NEWARK, NJ - MARCH 15 & 16


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!

56 OUT OF 61 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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