Option Investor


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Yesterday, I received this email.

"Perhaps I misunderstood the nature of your service. Does the "Couch Potato Trader" provide buy/sell recommendations? or is it a service to sell seminars?

Appreciate your prompt reply.


Here was my reply:

Have you bothered to read the postings? If you have, you will have seen that there are trade suggestions on a regular basis. Each column lists current open positions. The suggested trades have a remarkable track record. The column includes trading strategies and a great deal of educational material. Check back through the archives.

The seminar services I provide are for those traders who are serious about trading and who want to speed up the learning process and have an incredible two day experience. They are not for lemmings who just blindly place suggested trades. They want to know the whys and the hows. They want to learn to fish - not to just be given a fish. They want to know how to handle it if there's a problem.

In which category are you?

I hope that helps.


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Too Harsh?
Was I too harsh? I don't think so. I believe he was both serious and sarcastic. Actually, I like sarcasm. I've been known to use it myself from time to time. But, when I use it, I can back it up. And I would have, at the very least, had the balls to sign my name to my email.

I realize that nobody, and certainly no business, is going to make everybody happy. Those are unrealistic expectations. Those who try are just kidding themselves and will eventually drive themselves crazy. Life is too short. I'll just be myself and let the chips fall where they may.

A parting thought to this guy if he doesn't like the way I do things -- don't let the door hit you where the good lord split you! Sayonara.

While We're On The Subject
I receive frequent emails from trial subscribers and new Couch Potato Trader subscribers asking me how they can get up to speed on the strategies that we use. There are a few ways you can learn about what we do at the Couch Potato Trader. You can go back and read archived columns. There are specific educational columns about popular non-directional strategies. Plus, other columns contain little pearls of wisdom, trading tips, trading psychology etc.

If you navigate through my past postings, you'll also get a good feel for how I suggest trades, discuss their status, and how I feel about adjustment alternatives. In other words, you'll need to do some homework. Think of this as school.

This is the approach used by the majority of Couch Potato subscribers. After they read about a strategy we use, they send me a specific questions and I gladly answer. I may even call a subscriber on occasion when the question requires a bit more explanation than can be answered in a brief email if they sign their name and include their phone number. I welcome these questions. I admire the desire to learn and the effort put forth to that end. I'm willing to go above and beyond when it's obvious a subscriber has done his/her homework and has the passion to learn.

In the above email response, you see I used the word "lemming." That's the term I use for those who choose not to learn. There are those who want to use the Couch Potato Trader as a tout sheet for trades. That's fine, but what happens if the suggested trade doesn't get filled? What happens if the trade starts to go against them? Without the confidence and sense of creativity that comes from knowledge, they may find themselves up the creek.

Other subscribers choose to attend my seminar and take advantage of the one-on-one interaction and training. To each his own.

What Do You Think Of This?
I often get emails from subscribers who make me wonder. Here's a scenario. I may suggest a 20-contract 1140/1130 SPX bull put spread with the SPX at 1325 for a net credit of $.60. That's a typical Couch Potato trade.

Shortly after the trade is emailed to subscribers, the market dips 15 points. Now, here is the difference between a trader and a lemming. The lemming will put in the trade as suggested. Moments later, he will be filled at $.80-.90. "Wow," he thinks. He sends me an email bragging about his success.

What should he have done? Anyone who has attended my seminar, read past postings, or has a trader?s mentality, will understand that if the SPX has moved down 15 points, the game has changed. To retain a good safety level, he would simply lower the strikes of the bull put spread to 1130/1120 or perhaps 1120/1110 - where you may still be able to get the originally suggested $.60 premium. It ain't rocket science. Why wouldn't a trader want to be 10-15 points safer if possible?

The problem is that, most of the time, the initial trade will work out just fine. The trader wearing blinders will make the $.80-.90 premium and he'll think that he's got it all figured out. Will those 15 points make a difference? You bet. Especially the way the market has been trading in recent months. At some point, it will come back to bite this guy in the butt - and it might be a sizable bite. I just hope it's not financially terminal.

Unfortunately, if I walk off a cliff, there are an astounding number of traders who will follow me off the cliff. That would make for quite a mess at the bottom. Some might survive the fall, but their money would be gone.

OK. I'm done for now. Sorry if I got carried away. The guy's email just set me off a bit. I welcome your thoughts on the topic. It's fine to not agree with me. I won't be angry.

The Market
Another down day - 15.37 points on the S&P. In this volatile environment, it seems almost calm. Is the market being resilient in the face of bad news? Or, is it on its way back down to shake out the last batch of sellers before it begins to build a base and work it?s way back up?

I will be looking for additional bull put spread plays if the market continues down. I?m resisting the urge to put on bear call spreads because I've seen (just last week) what the market can do. Two days in one week the Dow was up over 400 points and the S&P was up 50 or more points. I don't know why, but that scares me more than the downside.

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I will be presenting a two-day advanced CPTI seminar in Las Vegas on June 21st & 22nd (Saturday & Sunday). Come on down! As of this evening, eight spots remain.

I've also negotiated an unbelievably low room rate for the weekend. Vegas is great for a getaway as well as for attending a seminar. Check out your calendar and contact me as soon as possible. Send your phone number to me at - Contact Support. I will personally call you to go over the details and to answer any questions you may have.

Also attending (and speaking) at the Las Vegas seminar will be Mike Cavanaugh, my personal broker and option strategist extraordinaire. Actually, he knows this stuff better than I do. I guaranteed you?ll be impressed.

Early Bird Special - SAVE $100
If you reserve your spot for the upcoming Las Vegas seminar by April 11th, you will only pay $895 - $100 off the normal low seminar price of only $995.

Reserving early will accomplish a few different things. The earlier you reserve, the lower your airfare will be. Plus, you will be assured of a spot.

Las Vegas Retakes Are Gone
As you may know, if you have previously taken one of my seminars (at any location), you are entitled to retake the seminar a second time at NO CHARGE! There were five retake spots available for the Vegas seminar. They are now gone. If you would like to be put on a waiting list, contact me. There is the occasional cancellation.

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CPTI April Position #1 - RUT Bull Put Spread ? 692.39

On 3/5, with the RUT at about 674.50, we sold 20 RUT April 560 puts and bought 20 RUT April 550 puts for a credit of $.55 ($1,100). Maintenance is $20,000. We will look to put on a bear call spread in the future - IF it makes sense.

CPTI April Position #2 ? SPX Bull Put Spread ? 1325.76

On 3/10, with the SPX at about 1288, we sold 20 SPX April 1110 puts and bought 20 SPX April 1100 puts for a credit of $.55 ($1,100). Maintenance is $20,000. We will look to put on a bear call spread in the future ? IF it makes sense.

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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 March profits, our new cash total is $60,460 ($58,660 $1,800).


On 2/6, with the SPX at 1342, we sold 30 SPX March 1140 puts and bought 30 SPX March 1130 puts for a credit of $.60 ($1,800). Maintenance is $30,000. Position closed 100% profitable. Profit: $1,800.

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LAS VEGAS - June 21st & 22nd

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.

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!


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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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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