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The construct of volatility derivatives has moved to a vulnerable state

By Lawrence G. McMillan

$VIX – the indicator which has not exactly been in tune with the negativity of this 2022 bear market  has now generated an intermediate-term trend sell signal. By that we mean that both $VIX and its 20-day Moving Average are above the 200-day Moving Average at this time. The sell signal will be in effect as long as that is the case. A previous trend sell signal occurred in December 2021 and was quite effective. In between, there was a trend buy signal, which was effective at first, but then deteriorated quickly.

Protection for Stock Owners (09:13)

By Lawrence G. McMillan

This article was originally published in The Option Strategist Newsletter Volume 9, No. 13 on July 13, 2000. 

Most option traders – even fairly novice ones – understand that options can be used to protect a stock holding against loss. However, when one delves into the specifics of establishing such protection, he usually forsakes the protection, often due to apparently high costs. In this article, we’re going to re-visit a subject that we’ve discussed before (protection), but try to bring some facts to light that might not be understood by many stock owners. The reason that we think this might be an apropos topic now is that it’s July, and July has marked a peak for the market in each of the last two years. There is some evidence (page 5) that a similar scenario might be unfolding again this year.

Webinar Recording: The Current State of Market-Predicting Option Indicators 9/14/2022

By Lawrence G. McMillan

Join Lawrence G. McMillan as he discusses the current state of his option-oriented indicators and what they are saying about the stock market. This video was recorded from his live webinar on September 19th, 2022.

Click here for a PDF slide deck of the presentation.

Larry McMillan Stock Market Update Video 9/19/2022

By Lawrence G. McMillan

Join Larry McMillan as he discusses the current state of the stock market on September 19, 2022.

Weekly Stock Market Commentary 9/16/2022

By Lawrence G. McMillan

The bulls seemed to think they were in charge up until the latest CPI data was released. Then, in an abrupt change of face big money began to sell on Sep 13th and just kept driving the market lower all day. That selling has continued, at a slower pace, and the support area at 3900 has been violated. That is important support, and now traders are looking to 3800 as the next support level, and then the yearly lows at 3673 below that.

Just How “Neutral” Is Delta Neutral? (12:08)

By Lawrence G. McMillan

This article was originally published in The Option Strategist Newsletter Volume 12, No. 8 on April 24, 2003. 

The concept of “delta neutral” is an intriguing one – especially to traders who have had a hard time predicting the market or to those who don’t believe the market can be predicted (random walkers). The concept is even sometimes “sold” to novice investors as a sort of “can’t-lose” trading method, even though that isn’t true at all. While the idea of having a position that can make money without predicting the direction of the underlying stock seems attractive, in practice the strategy is difficult, if not impossible, to apply – at least in terms of keeping a position delta neutral.

What’s Best: Covered Writes, Naked Puts, or Credit Spreads? (15:15)

By Lawrence G. McMillan

This article was originally published in The Option Strategist Newsletter Volume 15, No. 15 on August 10, 2006. 

In the past couple of months, we’ve published several articles dealing with covered call writing and some of its companion strategies – naked put writing or put credit spread trading. Two issues ago, the feature article addressed some of the ways that potential bear market risk affects popular strategies, including covered writes. In addition, several of the Covered Writing articles (that usually appear on page 5) have discussed various aspects of naked put selling and credit spreading. We have also received a number of inquiries about these alternate strategies from current and potential money management clients. Therefore, we have compiled this article, which addresses all the aspects of these similar, yet distinct strategies – risk, reward, and suitability.

Larry McMillan Stock Market Update Video 9/12/2022

By Lawrence G. McMillan

Join Larry McMillan as he discusses the current state of the stock market on September 12, 2022.

Weekly Stock Market Commentary 9/9/2022

By Lawrence G. McMillan

Early this week, stocks continued to sell off from their mid- August highs. But oversold conditions emerged (and are still in place in some cases), and $SPX rallied off of the 3900 level. That reinforces short-term support at 3900, and there should be support below that at 3800 and at the yearly lows, nearly 3637. But the next area of importance might be the resistance levels the first of which is at 4200, and then 4300 (the mid-August) highs. These oversold rallies have occurred all during 2022, with the average one gaining about 300 $SPX points.

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