Option Investor
Updates

A CALM DAY - FOR A CHANGE

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Oil rebounded today, but the market didn't tank. How about that? It seems like they trade conversely to one another. The market was mixed and ended up pretty much flat although it did bounce back from an initial triple digit loss. We like flat days. We'll take all we can get.

There was enough bad news today to torpedo the market, but the market was resilient. It did bend, but it didn't break. That should be encouraging for the bulls.

New October Position
On Tuesday, we saw an opportunity to jump into our first position in the October cycle. The RUT was at about 732, so we put on the October RUT 600/590. Even though the RUT has come down to 725, I'm still very comfortable with the cushion. If the SPX takes a dip, I'll be on the lookout for an October S&P 500 position.

Pre-and-post Market Futures
Often times, when I talk about putting on a trade at, or near, the open, I suggest you check out the futures. The futures will give you an idea about what direction the market might be headed.

The pre-market Dow, Nasdaq and S&P futures can be seen on all three financial stations every morning (CNBC, Fox Business Channel & Bloomberg). However, if you?re not near the boob tube, I stumbled across a few sites that might be helpful.

http://cnnfn.cnn.com/markets/afterhours
http://cnnfn.cnn.com/markets/morning_call
http://www.cme.com/cgi-bin/gflash.cgi

August Quickie Review
A few Couch Potatoes requested a review of last month's Quickie trades. This was the first month in a long time that all three quickies were not 100% profitable. We did have two winners - and one oops!

Our SPX Short & Sweet Quickie Strangle was short the 1190 put and short the 1310 call. The SPX settled at about 1294. We made a tasty $2,050.

Our NDX Iron Condor (1775/1750 & 1975/2000) was a nail biter, but all options expired worthless and our $1,850 of premium has a nice home in our pockets.

The RUT Iron Condor was the problem. Early on it was apparent that the 740 call was too close. Hopefully, Quickie players GTFO and took only a relatively small hit.

That's why I keep emphasizing how risky these quickie trades are. I know a few traders who didn't get out and who took a much larger than necessary loss. I'm noticing that a surprising number of inexperienced traders play the quickies. Then, they don't know what to do when the trade goes bad. I'll repeat it once more. The quickie trades are for experienced traders with a high risk tolerance a large trading account.

Book Notes
I'm chugging along, making steady progress, on my book project -- writing, editing, creating my own unique risk graphs. It's tedious, to say the least, but still fun. I just finished the chapter on Standard Deviations. It's an interesting concept that some Iron Condor traders swear by. We talk about this in depth at my seminars. Contact me (Contact Support) for details on the upcoming Dallas and Orlando seminars (see below). There's a wealth of premium out there to be had - IF you really know what where to look.

Changes
The only thing that is constant is change. In trading, as in life, be prepared -- because changes are on the horizon.

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CPTI SEPTEMBER Position #1 - RUT Bull Put Spread - 725.25

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 - 1277.72

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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CPTI OCTOBER Position #1 - RUT Bull Put Spread - 725.25

On 8,18, with the RUT at about 732, we sold 20 RUT October 600 puts and bought 20 RUT October 590 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 - 725.25

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 - 725.25

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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