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NEW TRADES & PROFITS - REAL AND HYPOTHETICAL

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NEW TRADES & PROFITS - REAL AND HYPOTHETICAL

Interesting. Yesterday, the SPX raced up and the RUT lagged behind. Today, the SPX gave back a chunk of yesterday's gains and the RUT again lagged, giving back the smaller gains from Wednesday. I'm not even going to try and guess why. I'll leave that for the talking heads to speculate on. I really don't care.

I rather like it when there are two volatile days and the market ends up pretty much right where it started. The volatility usually hangs in there and we're still in relatively good shape on our positions.

New September Position

Earlier today, it seemed like an opportune time to get things going for the five-week September cycle. With the RUT at about 720, we put on the September 610/600 bull put spread, taking in a credit of $.55.

As it turned out, the market moved down shortly after the position was suggested and some traders were able to get $.60 and higher for the same spread. Other traders took the move down and lowered their strikes to 600/590 for about $.50.

The Couch Potato Tater community was out in full force today as over 3,000 contracts were traded on the RUT 600 put. That consists of the majority on the 610/600 bull put spread and the rest on the 600/590.

Short & Sweet Profits

On Tuesday I checked out the progress of our Short and Sweet strangle position. Since the July expiration we were left with the December 530 puts and short December 930 calls. Our net credit was $9.70. We had some far out of the money long July positions to cover our short strangle. These long positions expired on expiration Friday and we were left with no long covering positions.

With the RUT up nicely on Tuesday, some of the volatility had disappeared and we was able to cover (buy back) the short positions for a debit of only $5.10. That left a profit of $4.60. We had four contracts, which translated into a nice profit of $1,840 ($4.60 x 400) on a nine-week position. Not too shabby, and no stress.

Should we have held on longer? Ask yourself a few questions. What did we have to gain? Well, if we were going to be responsible traders, we would need to buy a few more months worth of insurance. Whatever we spent on the insurance would reduce the net premium from $9.70 down perhaps another dollar.

The maximum we could have made, if we allow the position go to expiration (with no additional insurance expenditures), would be $3,880 ($9.70 x 400). It is worth it? If we could lock in almost 50% of the profit with no additional exposure, it seemed like a good idea - and still does. That's why we did it.

Another Short & Sweet?

Let's put on another Short & Sweet Strangle and see if we can bring in a few bucks for the good guys. Remember, this is a hypothetical position and is not an official Couch Potato portfolio trade. The prices below are based on Thursday's closing quotes.

Sell 4 December RUT 560 puts - RUWXL
Sell 4 December RUT 850 calls - RUZLJ
Credit of about $11.60

Buy 4 September RUT 560 puts - RUWUL (about $.80)
Buy 4 September RUT 840 calls - RUZIH (about $.30)
Debit of about $1.10

Net credit of $10.50 ($11.60 - $1.10). If you are more aggressive, and know what the hell you?re doing, you may not have to buy the long positions. Also, if you have the customer portfolio margining feature on your account, you won't need a ridiculous amount of money for the maintenance on this position.

Hopefully, we'll be able to pocket another $1,840 or more in the next eight weeks, or perhaps sooner. There is a very nice cushion on both sides of the trade, but you should still keep an eye on the position.

This is just one of the conservative non-directional strategies we now cover at my two-day seminar. Want to learn more? Of course you do, or at least you should - IF you?re a serious trader.

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CPTI AUGUST POSITION

CPTI July Position #1 - SPX Bull Put Spread - 1267.38

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.

CPTI AUGUST Position #2 - RUT Bull Put Spread - 714.52

On 5/23, with the RUT at about 735, we sold 20 RUT August 620 puts and bought 20 RUT August 610 puts for a credit of $.65 ($1,300). Maintenance is $20,000.

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CPTI SEPTEMBER Position #1 - RUT Bull Put Spread - 714.52

On 7?31, with the RUT at about 720, we sold 20 RUT September 610 puts and bought 20 RUT September 600 puts for a credit of $.55 ($1,100). Maintenance is $20,000.

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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 July profits, our new cash total is $64,220 ($62,110 $2,100).

SEPTEMBER ZERO PLUS POSITION - 714.52

On Friday 7/25, I put out an order to sell 30 September 1080/1070 bull put spreads for $.70. It was filled when the SPX dipped to 1251. That's $2,100 of premium. It's going to be a long wait, but I'm in no hurry.

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SHORT & SWEET - RUT - 714.52

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. We bought 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. Currently we have no long positions.

Closed Tuesday for a profit of $1,840 after only about 10 weeks of exposure. See discussion in article above. This is a nice stress-free way to trade. Also see the article above for a new Short & Sweet position.

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SEMINAR DATES -

DALLAS, TEXAS - October 3, 4 & 5

ORLANDO, FLORIDA - December 6, 7 & 8

62 OUT OF 68 PROFITABLE MONTHS!!
WANT TO ACHIEVE SUCCESS WITHOUT STRESS?
OF COURSE YOU DO!!
LEARN OUR CPTI WEALTH-BUILDING TECHNIQUES!

I?ve negotiated excellent low room rates for both 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) 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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