Blogs

The Option Strategist Newsletter Volume 23, No. 04 Preview

By Lawrence G. McMillan

There will be a very slight alteration of our publishing schedule in March.  The first issue in March will be published on the normal day, the 2nd Thursday, which is March 13th.  But the second issue in March will be published one day early, on Wednesday, March 26th.  This is because of the AAPTA Conference in Austin (see page 5), to which I will be traveling on Thursday, March 27th (the usual publishing day).

Weekly Stock Market Commentary 2/28/14

By Lawrence G. McMillan

The broad market, as measured by the Standard & Poors 500 Index ($SPX) has finally managed to close at a new all-time high. A second day closing above 1850 would solidify the breakout and give it more credence.

Equity-only put-call ratios (Figure 2 and 3) have finally rolled over to buy signals.

Market breadth has been strong all month. As a result,  the breadth indicators remain on buy signals, but they are in deeply overbought territory.

When $VXST Crosses Above $VIX

By Lawrence G. McMillan

In our last issue, we discussed the newest volatility product – the futures that have recently begun trading on the Short-Term Volatility Index ($VXST). One of the things that arose from that discussion was that $VXST “overshoots” $VIX on both the upside and the downside. That is, in periods of high volatility (spike peaks, for example) $VXST rises to higher prices than $VIX does. Conversely, in periods of low volatility, $VXST falls farther than $VIX does.

McMillan's Tips on Trading Volatility (Video)

In this MoneyShow.com interview, Lawrence G. McMillan discusses "how he trades volatility in today's markets and what strategies he has found to be the best." Larry talks about volatility ETFs and ETNs, the relationship between the VIX index and VIX futures, hedging, directional trading, and VIX spike peak buy signals. Watch the video at Moneyshow by clicking the image below.

Enhancing Option Portfolio Returns Using Probability and Statistics - Part 5

By Craig Hilsenrath

For information on Fat Tail Distributions and The Empirical PDF refer to Enhancing Option Portfolio Returns Using Probability and Statistics -  Part 4.

Weekly Stock Market Commentary 2/21/14

By Lawrence G. McMillan

The stock market rally that began on February 3rd continues to persist, almost daily.  The Standard & Poors 500 Index ($SPX) has only had two down days in that time.  Even so, there is some question as to whether it has the strength to overcome what is stubborn resistance at 1850.

Are Naked Puts for You? (Video)

In this MoneyShow.com interview, Lawrence G. McMillan "discusses why selling naked puts does not have to be as dangerous as many option traders may think." Larry explains why he prefers put-selling to covered writing, how he locates put-selling opportunities and what situations to avoid. Watch the video at Moneyshow by clicking the image below.

The Option Strategist Newsletter Volume 23, No. 03 Preview

By Lawrence G. McMillan

The CBOE has launched what may prove to be a very useful product – short-term $VIX futures ($VXST). The feature article discusses their terms and their potential usage. Also, there are comparative charts with $VIX and $VXST. If volume is decent, this should be an excellent product.

Weekly Stock Market Commentary 2/14/14

By Lawrence G. McMillan

A lot has happened in the past three weeks, but $SPX is literally unchanged from where it was at that time.  A nearly 100-point round trip has taken place -- down, then up.

A move above 1850, to new highs, would be very bullish for $SPX.  Although if it happens right away, it will be without support from many of our indicators.  Meanwhile, there is minor support at 1800, and major support at 1740 (the February lows).

Equity-only put-call ratios continue to remain on sell signals.

Short-Term $VIX Futures Begin Trading ($VXST)

By Lawrence G. McMillan

At face value, it certainly seems as if this new volatility product, the CBOE Short-Term Volatility Index (symbol: $VXST) will be useful and successful. In this article, we are going to look at all of the details (at least as far as they have been disclosed by the CBOE), as well as make some projections about how these new products might trade. These projections will be based partly on theoretical historic data, as well as what we know about how $VIX futures and options trade. 

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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