The Option Strategist Newsletter Volume 24, No. 05 Preview

By Lawrence G. McMillan

We have taken a new (or have returned to an old) approach for earnings-related straddle buying recently, and that is the subject of the feature article.  The article also summarizes other approaches to the strategy.  On page 3 is this week’s recommendation – in KMX.

Weekly Stock Market Commentary 3/27/15

By Lawrence G. McMillan

When $SPX broke down through the 2090 support level, that was a very negative sign, especially since stocks failed at the old highs.

There is now strong resistance at 2110-2120 (the February and March peaks), as well as at 2090 (again). As for support, the initial support level will be 2040, the early March lows. Below that, there is support at 1970-1990, which is the area of the December and January lows.

Event-Driven Straddle Buying

By Lawrence G. McMillan

Everyone is aware of the fact that stocks gap sharply on certain news events – primarily earnings reports and, for biotechs, FDA-related news.  Other events, such as lawsuit verdicts or settlements, can cause gap moves, too.  Option traders are aware of the potential of these events, especially when the timing of the event can be determined with some certainty.  

Weekly Stock Market Commentary 3/20/15

By Lawrence G. McMillan

In figure 1, the support at 2040 and the resistance at the recent all-time highs of 2120 are marked as a trading range. Until $SPX breaks out of that range, it really doesn't have a trend in place. To support that conclusion, the indicators are somewhat mixed.

Equity-only put-call ratios have remained on sell signals during this latest rally.

The Option Strategist Newsletter Volume 24, No. 04 Preview

By Lawrence G. McMillan

The U.S. Dollar has been getting a lot of press lately as it has nearly gone parabolic with a huge rally on top of an already long-term rally.  Optimism is rampant, and bears are cowed.  This is likely a good time to lay out a plan for a trade on the short side.

The U.S. Dollar and Other Extremes

By Lawrence G. McMillan

When the U.S Dollar moves, it often affects the price of many other things, especially commodities.  Of course, other currencies move in the opposite direction to the dollar, since we – as U.S. citizens – tend to view everything in dollar terms.  

Stan's "The Various Volatilities" Webinar 3/17/15

Stan Freifeld of McMillan Mentoring will be giving a free webinar titled The Various Volatilities: Learn How to Use Volatility to Your Advantage for eTradingExpo. The webinar will take place tomorrow, 3/17/15 from 2:45 pm - 3:30 pm EDT.

Click here for more information and to register

Weekly Stock Market Commentary 3/13/15

By Lawrence G. McMillan

The market, as measured by the Standard & Poors 500 Index ($SPX), had been laboring at new highs, near 2120. Then, last Friday it broke down below support at 2090, which turned the chart bearish.

Equity-only put ratios curled upwards late last week and gave confirmed sell signals on both the weighted and standard ratios. See Figures 2 and 3.

Tax Considerations: Section 1256 Contracts Revisited

By Lawrence G. McMillan

We usually try to run an article on this subject at least once during tax season. I realize that not everyone is aware of the rules governing Section 1256 contracts. Hence, since tax season is upon us, I thought this review might be of benefit to some of our subscribers – and to options and futures traders, in general.

Ivers Riley

By Lawrence G. McMillan

Ivers Riley, a long-term friend and business associate, died February 17th at his home in Savannah, Georgia. I met Ivers in the early 1980's when he was a cofounder of The Options Group – a consulting firm specializing in all the “new” forms of options that existed at that time (currency options and index futures, primarily, as I recall).

Trading or investing whether on margin or otherwise carries a high level of risk, and may not be suitable for all persons. Leverage can work against you as well as for you. Before deciding to trade or invest you should carefully consider your investment objectives, level of experience, and ability to tolerate risk. The possibility exists that you could sustain a loss of some or all of your initial investment or even more than your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and investing, and seek advice from an independent financial advisor if you have any doubts. Past performance is not necessarily indicative of future results.
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