Option Investor
Updates

NEW SEMINAR DATES ANNOUNCED!!

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HERE WE GO AGAIN - DOWN

Well, it was bound to happen. We've gone a number of option cycles without having a worry about our portfolio positions. The July option cycle may be a bit of a challenge. It looks like we may have some additional downside to come.

Today the market moved down big time - 38.82 points on the S&P 500 index. Today's move, along with the trend in recent weeks, was enough to get my attention. So today, we're going to take a look at potential adjustment levels.

I've already received a few emails asking when to GTFO. As I've said many times before, the exit point depends on a number of variables: your risk tolerance, your account size, the support and/or resistance levels, your personality and ability to sleep at night, etc.

There are still over three weeks left in the July option cycle. That gives us flexibility to maneuver in the current cycle if we choose - or to use the August cycle. It's nice to have choices.

Now, you have to look at your account size. Do you have sufficient maintenance available to roll down and/or out and perhaps add a few contracts? It's best if you have the customer portfolio margining (CPM). That opens up a lot of possibilities in making adjustments and putting on new positions.

First, as we consider our July 1250/1240 bull put spread, let's look at the SPX option chain based on Friday's closing prices.

Option Bid Ask
July 1270 put 17.40 18.90
July 1265 put 16.10 17.50
July 1260 put 14.80 16.20
July 1255 put 13.20 14.80
July 1250 put 12.00 13.60 (Current Short Put)
July 1245 put 10.90 12.50
July 1240 put 10.20 11.40 (Current Long Put)
July 1235 put 9.20 10.20

Now, get your calculators out and let's get figuring. The calculations below include negotiations between the bid/ask spread. These are also based on the SPX Thursday closing price of 1283.

To close the 1250/1240 bull put spread it would cost about $2.20.

You can figure out what it would cost to close out the 1250/1240 if the SPX moved down 10 points (to 1273) by looking at the 1260/1250 bull put spread.

To close the 1260/1250 bull put spread would cost about $3.00.

If the SPX moved down 20 points (to 1263), it would cost about $4.00.

Now deduct the premium that was taken when establishing the trade. If you only have the bull put spread, it's $.65. If it's a full Iron Condor, there's a total of $1.15. That will give you a starting point in figuring out how much you want to make up -- or IF you want to act now. There's nothing wrong with waiting for the market to settle down before deciding on your next position.

Take into consideration that, if the market is moving down, it's likely that the volatility will be increasing. Therefore, the numbers might be a little bit more than the above calculations. But, the purpose of this exercise is to give you an idea of what you'll be looking at if you choose to wait to close your 1250/1240 bull put spread until the index moved down.

The next decision is to determine what you want to do once you close out the 1250/1240 bull put spread. Do you want to roll down in the same (July) cycle? Do you want to roll (down and/or out, or both) to the next cycle? Do you want to put on additional bear call spreads to defray the cost of closing out the bull put spread?

We spend hours on premium negotiation and adjustment possibilities at my advanced seminar. There are about 25 recent seminar grads who are figuring out what they're going to do. They know when/if they're going GTFO the bull put spread. And they're evaluating the alternative.

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NEW SEMINAR DATES ANNOUNCED!

After a very special sold out Las Vegas seminar last week, I've put together two new seminar dates along with Early Bird Special dates.

OCTOBER 4 & 5 - DALLAS, TEXAS

DECEMBER 6 & 7 - ORLANDO, FLORIDA

You will save $100 if you complete your reservation for the DALLAS seminar by August 17th. Your two days of education and enlightenment will cost only $895.00. Stick around for a third day of education at no extra charge.

You will save $100 if you complete your reservation (including payment) for the ORLANDO seminar by October 1st. Your two days of education and enlightenment will cost only $895.00. Stick around for a third day of education at no extra charge.

A Bonus!!
I'm proud to announce that on the Mondays following the Dallas and Orlando seminars, my broker, Mike Cavanaugh will be giving a FREE one day presentation -- filled with strategy discussions and much much more. I will be there as well.

Contact me as soon as possible. Send me your phone number (Contact Support). I'll personally call you to reserve your spot and to answer any questions you may have. Both locations are great vacation spots. Plus, the earlier you get your airline tickets, the cheaper they'll be.

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A Visit To The Confessional

A little Italian boy enters the confessional. "Bless me Father, for I have sinned. I have been with a loose girl."

The priest asks, "Is that you little Joey Pagano"? "Yes, Father it is," replied Joey.

"And who was the girl you were with?" "I can't tell you, Father, I don't want to ruin her reputation."

"Well, Joey, I'm sure to find out her name sooner or later so you may as well tell me now. Was it Tina Minetti?? "I cannot say," replied Joey.

"Was it Teresa Mazzarelli?" "I'll never tell," said Joey.

"Was it Nina Capelli?" "I'm sorry, but I cannot name her," said Joey.

"Was it Cathy Piriano?" "My lips are sealed," said Joey.

"Was it Rosa DiAngelo, then?" "Please, Father, I cannot tell you."

The Priest sighs in frustration. "You're very tight lipped, and I admire that, but you've sinned and have to atone. You cannot be an alter boy now for four months. Now, you go and behave yourself," said the Priest.

Joey walks back to his pew. His friend Franco slides over and whispers, "What'd you get?"

"Four months vacation and five good leads!!!!!!!"

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CPTI JULY POSITIONS

CPTI July Position #1 - RUT Bull Put Spread - 698.42

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 - 698.42

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 - 1283.15

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 - 1283.15

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 ? 698.42

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 - 698.42

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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NEW SEMINAR DATES -

DALLAS, TX ? October 4/5

ORLANDO, FL -- December 6/7


62 OUT OF 67 PROFITABLE MONTHS!!
WANT TO ACHIEVE SUCCESS WITHOUT STRESS?
OF COURSE YOU DO!!
LEARN OUR CPTI WEALTH-BUILDING TECHNIQUES!

I?ve also negotiated a great low room rate for both weekends. 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) in Dallas and Orlando 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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