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A WILD RIDE - AND IT'S NOT OVER

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Friday was a prime example why I'm glad I'm a non-directional trader. There I was, Thursday night, a bit concerned about topside positions. And then . . . it hit the fan. Over 400 DOW points later, I guess we have a lot less to worry about - at least for the time being, especially for the topside positions. Two weeks from now, it might be a totally different story.

It appears that the market, which was poised to move up, will have go back down once more and start the process again of proving itself before it can start back up. That may take some time. What was the cause? We can place it on oil's doorstep. It's been nuts. Even if oil comes down a bit, it looks like the market may be in for some pain.

Will the market gap down on Monday? Or will it snap back? Directional traders are scrambling and will be placing their bets - each one sure he knows what's going to happen. They'll buy puts or sell calls if they think the market will continue down. They'll watch a pop up on Monday and wonder if it's the bargain hunters, and is it just a matter of an hour or two before it rolls over again. Maybe some will buy calls and try to scalp a few points on the bounce. Decisions, decisions, decisions . . . Glad we don't have to make them.

I can promise you one thing. As long as I have a few hairs left on my head, I will not place a directional option trade. For those of you who continue to play the dangerous directional game, I suspect that your next employment opportunity may involve a leaf-blower and the highlight of your daily diet will be government cheese.

Our June portfolio positions are just fine. Actually, many of you are already out of them. And our July portfolio positions are also in good shape as of right now. It looks like the volatility is back - but, is it back to stay? On Friday, the VIX was up 4.93 to 23.56. That means the premiums are ripe.

Those of you who may not have yet entered the July bull put spreads may consider taking advantage of this severe spike down to put on a position. However, you should NOT put on the positions that we originally established. With the increase in volatility and the lower underlying index price, you should be able to go much further out-of-the-money for your spreads.

Based on Friday's closing prices, you might be able to get about $.70 for the SPX 1220/1210 bull put spread, possibly. On the RUT, you'll still be in the 620/610 range. But don't just blindly put out orders. Take a look at the futures on Monday morning. If they're down big, wait to put a trade out there. You might be able to lower your bull put spread by five or ten points. That extra margin of safety is more valuable than the extra $.10-.20 you might get if you didn't move the strikes down.

Keep in mind that, as often happens when the market makes a big spike down, there is a pop up on the open. Buyers come in and shareholders sell into the strength. After awhile, the buying dries up and all are left are sellers. The market reverses and heads down again, soon turning negative. It doesn't always happen like that, of course. But, it happens enough to bear mentioning. There's no way of telling with any certainty. It's far from science. It never is when traders are reacting emotionally - which is most of the time.

Have patience, my children. Waiting is not a bad idea. There will still be plenty of option premium for plays on Monday afternoon or Tuesday, even if the market starts back up. It likely isn't going back up as fast as it came down. Fools rush in where angels fear to tread. Plus, remember, it's the second mouse that get's the cheese - even if it's government cheese.

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A VEGAS CANCELLATION
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

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CPTI JUNE POSITIONS

CPTI June Position #1 - SPX Bull Put Spread - 1360.68

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 - 740.37

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 - 740.37

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 - 740.37

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 - 1368.68

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 - 740.37

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 - 740.37

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 - 1368.08

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 - 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 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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