Option Investor
Updates

WAITING FOR EXPIRATION

HAVING TROUBLE PRINTING?
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As we patiently wait for the upcoming expiration and our 61st profitable month out of 66, I'm trying to find some interesting positions. June is a five week expiration cycle and we still have a week left in the May cycle. That's six weeks to June expiration.

The 200 day moving average seems to be substantial resistance for our S&P 500, the DOW and the NASDAQ indexes. Even though the market has come down a bit to test its recent breakout, it hasn't broken the recent uptrend. Will it continue down and break the uptrend? We'll have to wait and see. The volatility is hovering just below 20 on the VIX, meaning there's not an awful lot of premium to be had - especially on the call side.

Last week Lydia and I took a two day mini-trip to Holland, Michigan for the annual Tulip Festival. I make no excuses about the fact that I'm a terrible tourist. Why go to all the trouble to visit things in person when god created the Travel Channel? Do I give a bleep about tulips? Hell no, They're pretty, but if you've seen one, you've seen them all. My reward was that Tony Orlando was performing at the festival. I've enjoyed, Tony Orlando?s music for over 30 years. In another life, I was an oldies DJ and just love the music that you can understand a sing along to.

So, Lydia loved the beautiful tulips and I loved Knock Three Times and it was an enjoyable two days. The moral of this story is that it cost over $100 in gas. My toaster (a Honda Element) gets 20 miles per gallon (if there's no traffic and a tailwind).

It's easy to see how these oil prices are affecting our economy. Fortunately, due to my trading and a few investments, I'm not worried about where my next meal is coming from. However, with gas prices almost $4/gal., I find myself trying to consolidate my shopping errands, etc. I can imagine what less fortunate people (directional traders) must be going through.

I can see how the mid-range retailers and restaurants will be hurting till this thing turns around - if it turns around. I can also see how the Costcos, Walmarts, Sams Club, dollar stores, and McDonalds are going to benefit from the population trying to conserve in any way possible. Logic says that the resistance levels are going to be a lot tougher to break through. The unfortunate thing, though, is that the market is not logical. It tends to be emotional and reactive to the news of the day. That's what makes it all interesting and a challenge - to try and predict the unpredictable. That's why we proudly remain non-directional traders. If I was a betting man, which I am not, I'd be betting on south.

Hindsight . . .
Hindsight is always 20-20, isn't it? Last Monday I closed out the hypothetical May SPX 1390 short straddle and locked in $1,140 of profit. I was happy. I was only in the trade for a short while and one never knows where the market is going.

Well, the market reversed this week and closed Friday at 1388.28 - pretty close to being at-the-money. If I had waited until Friday, I could have closed the position for about $25.30 - locking in a profit of $18 x 200 = $3,600. That's three times what I took in on Monday. A nice piece of change, but, if I had it to do all over again, I wouldn't alter what I did. It's not that I don't like money. Next to Lydia, it's my favorite thing. However, I like the reduced exposure to the market with the short straddle strategy more than the possibility of some extra bucks.

Last Three Spots For Vegas
With a little more than six weeks to go, there are only three spots left for the Las Vegas seminar. If you'd like to join us, don?t procrastinate. Remember, I limit the seminar to 25 students.

Mike Cavanaugh, my broker, will be holding a free Q&A day on Monday, June 23 in Vegas following our two-day seminar. Mike will be discussing a variety of investment approaches, option strategies, customer portfolio margining, and how you can auto-trade the CPTI newsletter positions. The Monday event is at no charge. Send me your number and I'll call you with the details. mparnos@optioninvestor.com

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GO PISTONS! GO RED WINGS! TIGERS HAVE A PROBLEM.

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A Stupid Question
The next time someone asks you a really stupid question will you have the courage to respond like this guy?


He was buying a large bag of Purina Dog Chow at Wal-Mart and was about to check out. The woman behind him asked if he had a dog. (What did she think he had, an elephant?)

He told her that no, he didn't have a dog, but he was starting on the famous Purina Dog Chow Diet again. He said that he probably shouldn't, because the last time he'd ended up in the hospital. He had lost 50 pounds, but woke up in the intensive care ward with tubes coming out of most of his orifices and IVs in both arms.

He assured her that it was essentially a perfect diet. The way that it works is to load your pants pockets with Purina Dog Chow nuggets and simply eat one or two every time you feel hungry. But, since the food is nutritionally complete, he was going to try it again. (At this point, practically everyone in the check-out lines was enthralled with the guy and his story.)

But, horrified, the woman asked if he ended up in intensive care because the dog food had poisoned him.

He smiled and told her that no, he had stepped off a curb to sniff an Irish Setter's butt and a car had hit them both.

The guy behind her in line was laughing so hard he practically had a heart attack!

And, Wal-Mart won't let him shop there anymore.

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CPTI MAY POSITIONS

CPTI May Position #1 - SPX Bull Put Spread - 1388.28

On 3/31, with the SPX at about 1316, we sold 20 SPX May 1130 puts and bought 20 SPX May 1120 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 May Position #2 - RUT Bull Put Spread - 720.05

On 4/11, with the RUT at about 700, we sold 20 RUT May 600 puts and bought 20 RUT May 590 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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CPTI JUNE POSITIONS

CPTI June Position #1 - SPX Bull Put Spread - 1388.28

On 4/18, with the SPX at about 1392, we sold 20 SPX June 1235 puts and bought 20 SPX June 1225 puts for a credit of $.70 ($1,400). Maintenance is $20,000. We will look to put on a bear call spread in the future ? IF it makes sense.

CPTI JUNE Position #2 - RUT Bull Put Spread - 720.05

On 4/22, with the RUT at about 709, we sold 20 RUT June 590 puts and bought 20 RUT June 580 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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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 March profits, our new cash total is $60,460 ($58,660 $1,800).

ZERO PLUS POSITION - SPX - Bull Put Spread - 1388.28

On 3/31, with the SPX at 1316, we sold 30 SPX May 1130 puts and bought 30 SPX May 1120 puts for a credit of $.55 ($1,650). Maintenance is $30,000. We have plenty of time to find a bear call spread. Let?s hope the market cooperates.

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SEMINAR DATES -

WASHINGTON D.C. - Aug. 9th & 10th

LAS VEGAS - June 21st & 22nd


60 OUT OF 65 PROFITABLE MONTHS!!
WANT TO ACHIEVE SUCCESS WITHOUT STRESS?
OF COURSE YOU DO!!
LEARN OUR CPTI WEALTH-BUILDING TECHNIQUES!

I will be presenting our two-day advanced CPTI seminars in Las Vegas on June 21st & 22nd (Saturday & Sunday) and in Washington D.C. on August 9th & 10th (Saturday & Sunday). Come on down! As of today, only three spots remain for the Las Vegas seminar.

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 your calendar and contact me as soon as possible. Send me your phone number 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 guarantee you'll be impressed.

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!

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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