Option Investor
Updates

WE COMPLETE A CONDOR - PARTIALLY

HAVING TROUBLE PRINTING?
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The other day we put a bear call spread on our RUT 620/610 bull put spreads to complete our Iron Condor - but only for 10 contracts, not 20. There are another 10 RUT bull put spreads we haven't turned into Iron Condors yet. Why? Because I'm still not comfortable with the upside and I wanted to limiy the risk. Seeing the up action the last few days, the bear call spread might not have been a great idea.

I'm not really concerned, but there are still seven weeks left and a lot can happen. Sixty-five points is not a huge cushion, especially for seven weeks of exposure.

I'm still thinking about an SPX position for July, starting with a bull put spread. I'd like to see a pullback tomorrow morning to put on something in the 1250/1240 area. We may not get it. If we don't, then I'll have a decision to make.

Our June positions are in fine shape. Many of you who had the 590/580 bull put spread have already closed the position for a nickel to free up some maintenance dollars. As I've said before, there's no reason to hold onto a position for three additional weeks for a nickel when those maintenance dollars are needed for other opportunities.

Back By Popular Demand
Last month we put on a hypothetical Boston Strangle and it was particularly well received. Apparently, a lot of you pocketed some nice profit. Let's give it another try.

With the SPX at about 1398 (Thursday's closing price), let's:
Sell 4 SPX June 1365 calls
Sell 4 SPX June 1435 puts
Total credit of about $87.50

Remember, we have to give back $70 of the $87.50, so our maximum potential profit is $17.50 (x 400 = $7,000). The maximum profit will be realized at expiration - IF the S&P 500 settles anywhere between 1365 and 1435. However, there are three weeks left to expiration, and a lot can happen in three weeks. It's more realistic that we shoot for a nice profit with the intention of closing out the position prior to expiration.

This is a maintenance intensive trade - unless you have customer portfolio margining. Then, it's quite reasonable If you don't have customer portfolio margining, you can do this trade by buying long options about 120 points from your short options. For instance, you could buy the 1485 calls for about $.60 and the 1315 puts for about $3.90. That means you'll be using $4.50 of the potential $17.50 profit, leaving a net potential profit of $13.00.

It will require about $12,000 per contract in maintenance. You can adjust the number of contracts to your risk tolerance and account size. I will follow this hypothetical trade in the newsletter. Should be fun. If you haven't traded this strategy before, try it with a single contract until you get comfortable with the thought process and your emotional reactions to the situations that will inevitably come up.

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More From Larry the Cable Guy
1. The early bird may get the worm, but the second mouse gets the cheese in the trap.
2. Support bacteria. They're the only culture some people have.
3. A clear conscience is usually the sign of a bad memory.
4. Change is inevitable, except from vending machines.
5. If you think nobody cares, try missing a couple of payments.
6. When everything is coming your way, you're in the wrong lane.
7. Hard work pays off in the future. Laziness pays off now.
8. Eagles may soar, but weasels don't get sucked into jet engines.
9. Light travels faster than sound. That's why some people appear bright until you hear them speak.
10. Life isn't like a box of chocolates, it's more like a jar of jalapenos. What you do today might burn your butt tomorrow.

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CPTI JUNE POSITIONS

CPTI June Position #1 - SPX Bull Put Spread - 1398.26

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 - 745.55

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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CPTI JULY POSITIONS

CPTI July Position #1 - RUT Bull Put Spread - 745.55

On 5/23, with the RUT at about 735, we sold 20 RUT July 620 puts and bought 20 RUT July 610 puts for a credit of $.65 ($1,300). Maintenance is $20,000.

CPTI July Position #2 - RUT Bear Call Spread - 745.55

On 5/28, with the RUT at about 732, we sold 10 RUT July 810 calls and bought 10 RUT July 820 calls for a credit of $.50 ($500). This bear call spread completes an Iron Condor for 10 of the RUT bull put spreads previously put on 5/23.

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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 May profits, our new cash total is $62,110 ($60,460 $1,650).

JULY ZERO PLUS POSITION ? RUT ? 745.55

On 5/20, with the RUT at about 721, we sold 30 RUT July 610 puts and bought 20 RUT July 600 puts for a credit of $.70 ($2,100). Maintenance is $30,000. We will look to put on a bear call spread in the future ? IF it makes sense.

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SHORT & SWEET - RUT - 745.55

On 5/18, we opened a new hypothetical Short & Sweet position, selling 4 December RUT 530 puts and selling 4 RUT 930 calls for a total credit of $10.30. Then, we purchased 4 of the July 550 puts and 4 of the July 890 calls to give us two months (June & July) of protection for $.60. Our net credit, thus far, is $9.70.

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SEMINAR DATES -

LAS VEGAS - June 21st & 22nd


ONE SPOT LEFT!!


61 OUT OF 66 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). Come on down! As of today, only one spot remains for the Las Vegas seminar.

I?ve also negotiated a great 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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