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GOING, GOING, GONE

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On Friday it became clear that, for the sake of self-preservation (and capital preservation), it was time to let go of our 1250/1240 bull put spread. We had to say goodbye. The relationship was terminated. Like most relationships, it seemed like a good idea at the time. But, it got too close for comfort.

Sometimes, for the sake of all concerned, we have to sever ties and cut our losses. In many situations, also in trading and in life, the sooner this is recognized and acted upon, the better off you will be. The less pain you will experience.

So, on Friday, we closed our position and a load was lifted. When a position is being threatened, we carry a cloud of fear and anxiety with us until the situation is resolved. Is that the way you want to live? Plus, this emotional burden can become overwhelming and interfere with making logical decisions on our other positions. Time for me to GTFO.

Away we went. I originally put out our order to close the 1250/1240 bull put spread for $3.20. But, because I lead such a clean life (yeah, sure), the market immediately went up four points (to 1279) and the order came back filled at $3.05. For the 20 contracts, it cost $6,100 to close the original position.

During the afternoon, I received emails from subscribers who closed the 1250/1240 from $2.89 up to $3.15. The market does, indeed, bounce around - and so do the option prices.

Then, I was planning to wait to see where the market leveled out before rolling the position. However, I realized it was Friday (my favorite trading day) and decided to be proactive. I scoured the option chains for July and August.

Since there are still three weeks remaining in the July cycle, I wanted to see if there was sufficient premium remaining to warrant rolling down in July as opposed to rolling out to August.

As it turned out, the July 1190/1180 bull put spread looked like we could grab about $.80 of premium - not bad. I placed the order and was filled at the $.80. In effect, I was essentially buying an extra 60 points of cushion (from 1250 to 1190). I also increased the contract size from 20 to 25.

Some people are reluctant to increase the exposure. It's not my favorite thing to do, but adjusting positions isn't my favorite thing to do either. You have to make your own decision.

Now, we have a reasonable cushion - 88.38 points (1190 to 1278.38). It gives us a fighting chance, even though the TA folks are anticipating a capitulation move that will drive the VIX to over 30. Others are predicting an oversold relief bounce. Well, three weeks is a long time and we might get both. Let's hope that the 88 points can weather the storm.

The Chips Left To Play
This month is turning out to be an adventure - and Friday's activity might just be the beginning. I hate losing months, but they are a fact of life. Losses are simply a cost of doing business. No more, no less. As a matter of fact, some of the best trades you will ever make will be closing a threatened position - knowing your limits and acting on your plan.

"It's not the cards you're dealt, it's how you play them." Well, we still have a few chips left to play in this hand. Now that I've established a new bull put spread (1190/1180), I can generate some additional premium by putting on a July bear call spread. It appears that the trend is still down. If there is a relief bounce in the next few days, perhaps we can find something interesting for July. There will be no additional maintenance required for the new bear call spread.

Don't forget that we also have 10 contracts we can use for bear call spreads on our RUT position. We put on 20 bull put spreads, but only 10 bear call spreads. The option of putting on the other 10 contracts might also come in handy.

There's a lot to think about. We go over it all - in depth - at the seminar. If you'd like to feel confident about your exit/adjustment alternatives, you should join us. It can make a big difference.

SEMINAR RETAKES
Seminar grads who want to schedule their free retakes should contact me immediately (mparnos@optioninvestor). There are only five retakes per seminar and are first come first served. They go quickly. He who hesitates stays home.


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NEW SEMINAR DATES ANNOUNCED!
After a very special sold out Las Vegas seminar last weekend, 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.

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.

Contact me as soon as possible. Send me your phone number (Contact Support) and 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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THE BROTHEL
The madam opened the brothel door in Winnipeg and saw a rather dignified, well-dressed, good-looking man in his late forties or early fifties.

'May I help you sir?" she asked.

'I want to see Valerie,' the man replied.

'Sir, Valerie is one of our most expensive ladies. Perhaps you would prefer someone else', said the madam.

'No, I must see Valerie,' he replied.

Just then, Valerie appeared and announced to the man she charged $5,000 a visit. Without hesitation, the man pulled out $5,000 and gave it to Valerie, and they went upstairs. After an hour, the man calmly left.

The next night, the man appeared again, once more demanding to see Valerie. Valerie explained that no one had ever come back two nights in a row as she was too expensive. And there were no discounts. The price was still $5,000.

Again, the man pulled out the money, gave it to Valerie, and they went upstairs. After an hour, he left.

The following night the man was there yet again. Everyone was astounded that he had come for a third consecutive night, but he paid Valerie and they went upstairs.

After their session, Valerie questioned the man, 'No one has ever been with me three nights in a row. Where are you from?' she asked.

The man replied, 'Ontario'.

'Really', she said. 'I have family in Ontario.'

'I know.' the man said. 'Your sister died, and I am her attorney. She asked me to give you your $15,000 inheritance.'

The moral of the story is that three things in life are certain.
1. Death
2. Taxes
3. Being screwed by a lawyer

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CPTI JULY POSITIONS

CPTI July Position #1 - RUT Bull Put Spread - 698.14

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 - 698.14

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 - 1278.38

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. Position closed for debit of $3.05 ($6,100).

CPTI July Position #4 - SPX Bull Put Spread - 1278.38

On 6/27, with the SPX at about 1275 we rolled our 1250/1240 bull put spread position into a 25 contract 1190/1180 bull put spread for a credit of $.80 ($2,000). We will look for a bear call spread to complete the Iron Condor.

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CPTI AUGUST POSITION

CPTI July Position #1 - SPX Bull Put Spread - 1278.38

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 - 698.14

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 - 698.14

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 -

DALLAS, TX - October 4, 5 & 6

ORLANDO, FL - 6/7 & 8


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

I've negotiated a great low room rate for the upcoming seminars. 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 upcoming seminars 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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