Option Investor
Updates

KEEPING YOUR POWDER DRY

HAVING TROUBLE PRINTING?
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I sent out a trade suggestion this afternoon, about 2:40 p.m. (ET). It's what I believe is a nice safe position - a SPX 1170/1160 bull put spread for a credit of about $.65. It was a bit late in the day, but well over 1,000 contracts were filled on both options. I suspect more will jump in tomorrow.

I received emails from some traders saying they didn't have enough maintenance to participate. They said they would have to wait until Monday, when their maintenance dollars are released, to try to put on the trade.

There are a few issues here that I'd like to address. First, how many times have I emphasized that you should keep powder dry for unforeseen adjustments and/or opportunities? If those emailers had done that, they could have easily have put on today's position. Besides, their maintenance for the June positions should be freed up tomorrow (Friday).

Secondly, how many of you out there are still with a broker who doesn't release maintenance funds on Friday? This is a perfect example of why that is a distinct advantage and can make a difference in your trading.

The SPX bounced around, mostly up, after I sent today's post. However, it settled right about where it was when I originally put out the trade. That means that those traders who are with a progressive options broker who releases their maintenance funds on Friday, may be able to get into the trade on Friday. The advantage is that, if they had to wait until Monday, they are dealing with two extra days of time (premium) erosion. With all things being equal, if they wanted to put on the same trade Monday, they might have to settle for a nickel or dime less premium. It may not sound like much, but those nickels and dimes really add up. Having those bucks in your pocket significantly alters, in a positive way, your percentage returns. Plus, the market has time to move and could conceivably move away resulting in the trader missing the trade altogether.

If you have the wrong broker, it can be fixed and it's painless. Contact me (Contact Support) and I'll send you the contact information for MY broker, Mike Cavanaugh. He's excellent and he would love to help you make money. He's also set up to auto-trade my trade suggestions.

More Email Questions . . .
Today, I also received emails from traders who were confused by the bid/ask spreads on the SPX 1170 and 1160 puts. They wrote that their option chain read:

Strike Bid Ask
1160 5.60 10.40
1170 2.70 10.70

The emails ask, "How did you figure a $.65 credit when it looks like there's a $7.70 debit?" Good question. It's magic (not really). There is no simple answer. I refer them back to the articles in the Couch Potato Trader archive that discuss the negotiation between the bid/ask spread. We spend hours on it at my seminar. By the time we're done, attendees can do this on their own. Negotiating, and consistently getting, those extra nickels and dimes is sweet.

On My Way To Vegas . . .
Tomorrow morning I'll be leaving for the Las Vegas seminar. I'm looking forward to it. The weather report says it will be about 108 degrees. No problem. If a little bit of me melts away, that's fine with me. I have plenty to spare.

Quickies Update
Glanced at the quickie trades. Things look pretty good for both quickie trades to be 100% profitable. Barring outrageous Friday morning settlement numbers, the quickie followers should be happy campers. Actually, the quickies have been consistently profitable. I think the happy campers can now afford to stay in a hotel.

By The Way . . .
In today's suggested trade, I made a miscalculation. I said the cushion was about 20%. In reality, the cushion is closer to 13%. Sorry. It's still a good trade that has a great chance of success.

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CPTI JUNE POSITIONS

CPTI June Position #1 - SPX Bull Put Spread - 1342.83

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.

CPTI JUNE Position #2 - RUT Bull Put Spread - 737.83

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).

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CPTI JULY POSITIONS

CPTI July Position #1 - RUT Bull Put Spread - 737.83

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 - 737.83

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 - 1342.83

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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CPTI AUGUST POSITION

CPTI July Position #1 - SPX Bull Put Spread - 1342.83

On 6/19, with the SPX at about 1342, we sold 20 SPX August 1170 puts and bought 20 SPX August 1160 puts for a credit of $.65 ($1,300). 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 - 737.83

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 - 737.83

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 - 1342.83

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

New Date To Be Announced Soon


61 OUT OF 66 PROFITABLE MONTHS!!
WANT TO ACHIEVE SUCCESS WITHOUT STRESS?
OF COURSE YOU DO!!
LEARN OUR CPTI WEALTH-BUILDING TECHNIQUES!

I am 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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