ryanbrennan's blog

By Lawrence G. McMillan

Yesterday, I joined the team at tastylive for a conversation about the current market, some of the strategies I’m trading today, and how my approach to options has evolved over the years.

We started with the broad market. I remain cautiously bullish, particularly as long as the S&P 500 holds above the 7,600 level. The subdued $VIX and positively sloped volatility term structures are also encouraging, although breadth and new highs versus new lows remain somewhat shaky.

From there, we got into some of the strategies I’ve been using recently, including 0DTE index options, put credit spreads combined with upside calls, broken-wing butterflies, and rolling positions as the market moves.

We also spent some time looking back. I shared the story of how Options as a Strategic Investment came about, as well as how my own trading has changed over more than five decades in the options markets. Today, I tend to trade fewer names with larger positions, and I roll much more frequently than I did earlier in my career.

One thing that hasn’t changed is how much I enjoy trading. After all these years, I’m still actively trading because I find the markets interesting and challenging—and, quite simply, because I still think it’s fun.

You can watch my full conversation with tastylive below.

By Lawrence G. McMillan

McMillan has joined INVST — and the research, advisories, data, and market analysis you rely on will continue.

We recently announced an important new chapter in McMillan’s history: INVST has acquired McMillan. For our longtime subscribers, customers, and readers, we want to start with the most important point:

McMillan isn’t going away.

By Lawrence G. McMillan

We have been cautioning about a potential increase in implied volatility ($VIX) for some time. However, $VIX has essentially refused to move higher. In fact, it’s in a distinct downtrend ever since $SPX began the latest rally from about the 7300 level. We are not alone in our opinion, which is perhaps one reason why volatility has remained low: “everyone” is all set with long $VIX calls or long $SPX puts, waiting for the volatility explosion, and the majority is often wrong.

By Lawrence G. McMillan

A little more than a week ago, the FOMC meeting concluded (on July 29th), and traders were not happy. They sold the market before and after the meeting, closing $SPX that day at 7316. But then a series of events both real and psychological took place that released a buying panic.

By Lawrence G. McMillan

The market has been frustrating to many over the past two months since new all-time highs were made in early June. Bulls expected another attempt at new highs by now, while bears expected a larger correction (given the uncertainties of Iran, interest rates, etc.). But the fact is, $SPX has remained in a trading range over that time.

By Lawrence G. McMillan

It is once again time to consider that $VIX may have bottomed for the year. It is a common occurrence for $VIX to make its annual lows in July and then begin to rise in August. Sometimes that rise is stupendous, as it was two years ago. Most of the time the annual peak for $VIX is reached in October, which is when the market often sells into a strong bottom. We can compose a seasonal chart of $VIX. Chart 1 encompasses the years 1989 through 2025 (the most recent full year of trading). While there is $VIX data for earlier years, including 1987 and even 1988 distorts things too much. The data in Chart 1 uses the “current $VIX at the time” – regardless of how it was calculated.^[1]

By Lawrence G. McMillan

Buying the dip has been working on an intraday basis recently, but the larger picture is that there are dips to buy almost every day. That means that $SPX is not making much progress. Despite breaking out on the upside from the triangle formation that had existed, it has run into resistance at 7580 and has failed to challenge the all-time highs at 7600-7620. This keeps the $SPX chart from being upgraded to "bullish." Rather, it is range-bound at best.

By Lawrence G. McMillan

Volatility products like VXX remain among the most misunderstood trading vehicles, and many of the misconceptions that existed when this article was first published still persist today. Although the piece below dates back to 2010, the underlying mechanics of futures rolls, contango, backwardation, and the performance drag built into volatility ETPs are just as relevant for today's traders. If you've ever wondered why VXX can behave so differently from the VIX itself, this classic explanation from 2010 is well worth revisiting.

By Lawrence G. McMillan

One of the standing guidelines that appears in every issue of The Daily Volume Alerts is:

“In positions with just outright long options (including long straddles), roll if that option becomes 10 points in-the-money or more.”

A recent subscriber asked a logical follow-up:

What should I roll to?

My answer:

By Lawrence G. McMillan

For a limited time, get Lawrence G. McMillan's 14-Seminar Home Study Course for only $99 (regularly $499).

Whether you're just getting started with options or looking to sharpen advanced trading skills, this comprehensive video course gives you more than 14 hours of instruction from one of the most respected names in the industry.