Blogs

The Option Strategist Newsletter Volume 22, No. 23 Preview

By Lawrence G. McMillan

The feature article was designed to be a piece about the January Effect (the period of time when small-caps outperform big-caps, after tax loss selling has ended). But the study revealed some new facts about seasonality, and we make a modification to our Post- Thanksgiving trade because of it.

Is There a January Effect?

By Lawrence G. McMillan

You’d have to be a pretty long-term subscriber to remember when we used to trade the January Effect. For a long time, it worked like a charm, but then traders started to anticipate the effect, shifting its time frame, and then it stopped working altogether – obliterated, it seems, by conflicting forces, seasonality, and changing market conditions.

Weekly Stock Market Commentary 12/13/13

By Lawrence G. McMillan

The market -- as measured by the S&P 500 Index ($SPX) -- has declined on eight of the last ten days, and that has taken a toll on the technical indicators. However, $SPX is sitting right on support at or just below 1780 (see Figure 1). Hence, shorting the market now could be a mistake.

McMillan Interviewed at The Disciplined Investor

Lawrence McMillan was recently interviewed at The Disciplined Investor podcast where he explained some of the ways in which investing with options can be beneficial.  Larry also discussed some of his favorite strategies and advised which he stays away from.  Listen to the full interview by clicking here.

Weekly Stock Market Commentary 12/6/13

By Lawrence G. McMillan

From a broad viewpoint, using our indicators, the picture is actually fairly bearish except for one major thing: the price chart of the Standard & Poors 500 Index ($SPX) has not broken down. A decline below 1780 would also interrupt the bullish pattern that currently exists of higher highs and higher lows on the $SPX chart.

The Option Strategist Newsletter Volume 22, No. 22 Preview

By Lawrence G. McMillan

The feature article discusses various trading strategies and systems around Thanks-giving Day.  The article culminates with the recommendation that we already made in previous Hotlines: to buy “the market” at the close of trading on the Wednesday before Thanksgiving.  The article provides some new ways of looking at the entire trade, including holding longer than we have in the past.

Stan’s Option Challenge: Question #1

We all know that trading options is exciting, highly competitive, and can be very profitable. The key to long term and consistent profits in option trading is options education. The McMillan Mentoring Program, which is run by former Market Maker, white badge AMEX Floor Official, professional trader, and longtime MENSA member Stan Freifeld, can take your trading to the next level.

Weekly Stock Market Commentary 11/29/13

By Lawrence G. McMillan

Price action -- via the $SPX chart -- and volatility have remained bullish. We have often said that price is the main indicator and that has certainly been the case this time.

Equity-only put-call ratios turned bearish a little more than a week ago and remain on sell signals.

Market breadth has generally been weaker than the market until very recently, but now the breadth indicators are rolling back over to buy signals.

Enhancing Option Portfolio Returns Using Probability and Statistics - Part 1

Craig Hilsenrath

With nearly four thousand optionable U.S. equities and ETFs and over 400,000 individual option contracts available on a daily basis, retail option traders need a way to determine the optimal way to allocate their investment capital. By employing some well known statistical techniques to calculate the expected profit and return for a set of option positions, an option strategist can rank possible trades.

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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