Option Investor
Updates

PROFITS! PROFITS! PROFITS!

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The Friday settlement came and went. It had no affect on our Couch Potato Portfolio positions. We had huge cushions on our positions and slept very well Thursday night. We have now recorded our 63rd PROFITABLE MONTHS out of 69.

After an unfortunate July, we welcomed a relatively easy August. It wasn't so easy for some folks who had put on the 760/770 RUT bear call spread. In one of those rare occurrences, the RUT settlement number (765.07) was actually higher than the high for the day. The recorded high was 764.38.

On Thursday the RUT closed at 754.38. I know that some traders decided to roll the dice rather than buy back the short 760 call for $.60-70 earlier on Thursday. Well, sometimes you get the bear and sometimes the bear gets you. The bear feasted on those who held on learned. The traders learned an expensive lesson. They got hit for $5.07. Multiply that by 20 contracts and you?re looking at a $10,000 hit. It's not pretty - especially when they could have exited the trade for a $100 - $300 loss.

September Thoughts
We now start the vigil -- waiting five full weeks until we can report profitable month number 64. That's OK. We're patient. And, for starters, we also have on two excellent September positions. At least they look excellent right now - especially since the market seems to want to move up.

You may have an opportunity to close our September RUT 600/600 bull put spread well before expiration. If you want, just for the hell of it, throw out an order to close the position for a nickel or a dime. Based on Friday's closing prices, I think there's a pretty decent chance you'll get filled.

One thing I've noticed is that, if you put out the order before the market opens, a lot of strange things happen in the chaos that takes place at the open. Those who have a lot of maintenance dollars to work with may not find it necessary to close the spread early. However, if you have limited funds, you might consider it. After all, why wait for five weeks for a nickel or a dime?

Traders who have the customer portfolio margining feature on their account, as I've said before, will have a lot more flexibility in their trading.

We'll have to wait a bit longer to close our 1120/1110 SPX bull put spread. The spreads are still to wide. No problem. We're a patient group, aren't we.

In the meantime, we'll watch closely at the market. If the S&P 500 breaks through the 1305 area, we may consider putting on a bear call spread. Right now, based on Friday's prices, we might be able to put on a 1400/1410 bear call spread. However, that would only give us about a 100 point cushion. We've seen how a cushion like that can disappear pretty quick.

The last thing we want to do is get into trouble. That's no fun - just ask those who put on the 760/770 bear call spreads last month.

Dallas Seminar Update
A dozen traders took advantage of the opportunity to save $100 by registering early. The seminar will be the first weekend in October (3rd & 4th) - about a month and a half away.

Come join us. It's a weekend of fun and education you'll never forget. (Contact Support). Learn what you need to know to take your trading business to the next level - and put yourself in a position to profit in most any market environment - conservatively. Can the income supplement your job? Sure. Can it replace your job? If you learn how to do it right, and consistently. If you're serious, what are you waiting for?

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S&P 500 Support & Resistance - Closed at 1298.19
Resistance:
1317 from the February low
1320 is a 50% retracement of the May to July sell-off
1324 is the April low
1331 is the June low
1349 is an ancient trend-line
The 200 day SMA at 1369
1370 is the August 2007 intraday low
1374 is the March 2007 closing low
1387 is the April 2008 intraday high
1396 is the February 2008 peak
1406 is the August and November 2007 closing low

Support:
The 50 day EMA at 1294
1285 is the recent July peak
1270 is the January low
1257 is the March low
1244 is an August 2005 peak
1240 to 1221 are September 2005 peaks

1234 is the July 2006 low
1234 is the late July low
1224 is the June 2006 low
1176 from the Q4 2005 lows
1167 is the January 2005 low
1154 from the May 2005 lows
1142 is the 2005 closing low

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TRACKING CPTI PORTFOLIO RESULTS
Welcome to our tracking of CPTI portfolio's year number six! We've just completed the tenth month (August) of CPTI tracking year number six. Our positions for August worked out just as we planned. Our profit for the tenth month of our sixth year was $2,200. In our sixth tracking year, we accumulated a profit of $13,985 ($10,785 $2,200)).

RECAP OF JULY POSITIONS
See Position Details in July Summary Below

SPX Bull Put Spread ? PROFIT: $1,100
RUT Bull Put Spread ? PROFIT $1,100

AUGUST PROFITS: $2,200

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August Settlement Numbers
S&P 500: $SET - 1294.49
Russell 2000: $RLS - 765.07
S&P 100: OEX - 598.88
MID 400: $MIV - 825.07

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SUMMARY OF CPTI AUGUST POSITIONS

CPTI July Position #1 - SPX Bull Put Spread - 1298.20

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). PROFIT: $1,300

CPTI AUGUST Position #2 - RUT Bull Put Spread - 753.37

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). PROFIT: $1,300.

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CPTI SEPTEMBER Position #1 - RUT Bull Put Spread - 753.37

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. I'll look to put on a bear call spread in the future - IF it makes sense.

CPTI SEPTEMBER Position #2 - SPX Bull Put Spread - 1298.20

On 8/7, with the SPX at about 1275, we sold 20 RUT September 1120 puts and bought 20 SPX September 1110 puts for a credit of $.55 ($1,100). 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 July profits, our new cash total is $64,220 ($62,110 $2,100).

SEPTEMBER ZERO PLUS POSITION - 753.37

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 ? 753.37

On 8/1, we opened a new hypothetical "Short & Sweet" position, selling 4 December RUT 560 puts and selling 4 RUT 850 calls for a total credit of $11.60.

Traders with less experience, smaller trading accounts or those without customer portfolio margining, might want to buy 4 of the September 570 puts and 4 of the September 850 calls to give you two months (August & September) where the short positions are covered for about $1.10. Their net credit would then be $10.50.

Our objective is to do exactly what we did with the previous Short & Sweet Strangle. We want to let time decay and reducing implied volatility do their thing, so we can close the position and lock in some nice profits.

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SEMINAR DATES -

DALLAS, TEXAS - October 3, 4 & 5

ORLANDO, FLORIDA - December 6, 7 & 8

63 OUT OF 69 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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