Exiting a Put For Parity Near Expiration

By Lawrence G. McMillan

Often at expiration, an option trader will have in-the-money options that need to be either exited or rolled. Market makers know this and purposely widen the spreads in the market so that the bid for the option is below parity. On expiration day, the option has a value of at least parity so the astute trader must always make sure he exits the position at parity or higher. For a put, parity is the strike price minus the underlying price.

Announcing Option Workbench 3.0

By Craig Hilsenrath

We are proud to announce the release of Option Workbench 3.0! This upgrade to Option Workbench puts even more power in your hands with these new features:

Weekly Stock Market Commentary 3/7/14

By Lawrence G. McMillan

This week's action makes the $SPX chart bullish (how could it be anything else when trading at new all-time highs?).

There is no technical resistance for a chart at new all-time highs. There is support at 1850 (which had been resistance), then at 1825- 1835 below that.  It is our opinion that a close below 1825 would be quite negative.

Equity-only put-call charts continue to be bullish.

Spring 2014 Technical Analysis Conferences

By Lawrence G. McMillan

This is the time of year when many organizations have their annual conferences, many of which are open to the general public. The quality of the presentations at these conferences is far higher than at general trade shows, for the audience is primarily professionals, and so the speakers are of the highest quality.  

McMillan's Tools to Gauge the Stock Market (Video)

In this interview, Lawrence G. McMillan talks about "how he measures the market's overbought and oversold status." Larry discusses breadth oscillators and modified Bollinger Bands, and details calculations and provides signal pramaters. Watch the video at Moneyshow by clicking the image below.

Stan’s Option Challenge: Question #4 (Free Month of The Option Strategist)

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 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 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.

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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