Option Investor
Updates

A POSITIVE THURSDAY

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The market started up this morning and never really looked back. Our two primary indexes (SPX & RUT) closed at their highs and, with this momentum, it looks like the market wants to continue up.

Tomorrow is an important jobs number. Traders typically react to this number. Was today just a log of short covering? Was it a matter of buying the rumor and selling the news? Hell if I know. I don't even want to guess. I suck at it. That's why I try to trade non-directionally. As Dirty Harry said, "A man has to know his limitations." I like to think I know mine.

Right about now I'm glad we only put on 10 contracts of the July RUT 810/820 bear call spreads instead of 20 contracts. There are still six weeks to go to July expiration. That's a long time - and it may end up seeming like an eternity.

Our June credit spreads couldn't be safer. The July positions, especially the bear call spread, may require some closer monitoring if the market continues up significantly.

You know how I like to trade on Fridays - to get those extra nickels of premium. I'll keep my eyes open, but I think we may have enough positions -- at least for the moment. Also, I think many Couch Potatoes are a bit extended maintenance wise.

Boston Strangle Position
The big up day today came in handy for our Boston Strangle position. The market had dipped to the lower part of our range. The additional $26 points brought the SPX right back up to mid-range - a comfortable place to be. Normally, I'd be looking to take a profit pretty soon. However, in the days the market came down, the volatility increased and that translated into higher premiums. They weren't deteriorating. They were actually going up.

The effect of volatility moving up accompanied by the additional premium being in the options is the same as adding an extra week or two to the life of the option. Today's almost 20 point gain on the RUT reduced the VIX back down by 2.17 points. It helped, but it's still more than two points higher than the recent low of 15.82.

The bottom line is that there has not been a lot of progress made in the quest to make this a relatively quick trade. We'll just have to be a little more patient and watch for opportunities.

A VEGAS CANCELLATION
Yesterday, one of the folks scheduled to attend the upcoming Las Vegas seminar contacted me to cancel because of a scheduling conflict. Prior to that, the Vegas seminar was SOLD OUT! This frees up ONE seminar spot. If you want to join us for an incredible weekend of fun and education, contact me as soon as possible - Contact Support

Pistons & Red Wings
Well, one out of two ain't bad. The Pistons weren't up to the task this year. They reached the Eastern Conference finals, but lost to the Celtics. The Red Wings, however, won the whole damn thing -- the Stanley Cup. They are the champs.

It's nice because Detroit, despite its many shortcomings (including a liar and a thief for a mayor), is a great sports town. Detroit fans, many of whom don't have much to cheer about in their lives, live vicariously through the victories and defeats of our sports teams. Congratulations Red Wings - and thanks!

S&P 500 Support & Resistance
Resistance:
1406 is the August and November 2007 closing low
The 200 day SMA at 1424
1432 is a longer term trendline from the August 2003/September 2004 lows
1433 from a pair of August 2007 lows and December mid-month intraday low
1446 from the December low
1460 is the February 2007 peak
1481 represents several peaks and lows ranging from April 2007

Support:
1396 is the February 2008 peak
The 18 day EMA at 1393
1387 is the April 2008 intraday high
The 50 day EMA at 1385
1370 is the August 2007 intraday low
1374 is the March 2007 closing low
The 90 day SMA at 1363
1340 is an ancient trendline


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CPTI JUNE POSITIONS

CPTI June Position #1 - SPX Bull Put Spread - 1404.05

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 - 763.27

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 - 763.27

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 - 763.27

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.

CPTI July Position #3 - SPX Bull Put Spread - 1404.05

On 5/30, with the SPX at about 1399, we sold 20 SPX July 1250 puts and bought 20 SPX July 1240 puts for a credit of $.60 ($1,200). Maintenance is $20,000. I?ll 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 May profits, our new cash total is $62,110 ($60,460 $1,650).

JULY ZERO PLUS POSITION - RUT - 763.27

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 - 763.27

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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JUNE BOSTON STRANGLE - SPX - 1404.05

On 5/30, we opened a new hypothetical Boston Strangle by selling 4 June 1365 calls and selling 4 June SPX 1435 puts for a gross credit of $87.50 and a net credit, and potential profit, of $17.50. This is an uncovered Boston Strangle position. Some traders, who don?t have customer portfolio margining or a large enough account to trade uncovered index options, would have had to buy far OTM options to be able to participate in such a trade.

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SEMINAR DATES -

LAS VEGAS - June 21 & 22 - SOLD OUT!!


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 Monday afternoon, the Las Vegas seminar was SOLD OUT

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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