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.
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.
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.
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.
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.
In a recent issue of The Option Strategist Newsletter, we deatailed a trading system based on a modified version of John Bollinger's Bollinger Bands. We have since received numerous inquiries asking how we calculate and plot our "modified" version.
One of our customers recently asked a good option-related question regarding premium in index options. This is a fairly common inquiry so I figured my response is worth sharing with everyone. See the question and answer below.
Customer:
Hi Larry,
I see ES call premium is much less than put premium for equal distance strikes. Does this mean market is bearish biased?
