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Covered Calls vs. Selling Puts: The Same Strategy, Different Name

By Lawrence G. McMillan

With the recent market sell-off, some traders have been shifting from selling puts to writing covered calls. The argument is that selling puts in a declining market is riskier, while covered calls provide a safer way to generate income. However, this belief misunderstands the fundamental equivalence of the two strategies.

Understanding the Difference Between the Standard and Weighted Put-Call Ratio

By Lawrence G. McMillan

The put-call ratio is a widely used sentiment indicator in options trading, helping investors gauge market positioning by comparing the volume of put options traded to call options. However, there are two primary ways to calculate this ratio: the standard put-call ratio and the dollar-weighted put-call ratio. Understanding their differences can provide deeper insight into market behavior.

Daily Put-Sale Insights: Identifying High-Probability Trades

By Lawrence G. McMillan

Each day, The Daily Put-Writer newsletter provides a list of potential naked put-sale candidates, selected using McMillan’s proprietary put-writing methodology. In addition to the daily list, we highlight specific trading opportunities when conditions are favorable.

Today’s Put-Sale Candidates

Below is a sample of today’s top put-sale candidates:

Short-Term Buy Signal Triggered: Oscillator Differential Buy Signal

By Lawrence G. McMillan

A short-term buy signal was triggered at Friday’s close: the “oscillator differential” buy signal. This occurs when the two breadth oscillators, which had spread far apart in recent weeks, come back within 200 points of each other. Historically, this has been a reliable short-term, one-week buy signal.

Free Weekly Stock Market Commentary 3/14/2025

By Lawrence G. McMillan

The market, as measured by $SPX, continues to fall at a rapid rate. It has broken down below the lower end of the trading range that had existed since last November. It also broke through a support line at 5670 (higher horizontal red line on the $SPX chart in Figure 1). The next support area is likely to be near 5400, which was last September's lows.

A Timely Opportunity in the $VIX/SPY Hedged Strategy

By Lawrence G. McMillan

Over the years, I’ve written extensively about the $VIX/SPY hedged strategy, a position that allows traders to take advantage of the inverse relationship between volatility and the stock market. The strategy is designed to profit from large market moves in either direction, but its real power emerges when an “edge” appears—such as when $VIX futures trade at a sizable premium or discount to the $VIX index.

Is A Volatility Explosion Possible? (Preview)

By Lawrence G. McMillan

The 20-day Historical Volatility of the $VIX futures (middle row of the table below) is now exceedingly low.  This will not last, and one can expect some sharp movements in the ensuing weeks, but the timing of such a move is not clear.  There have been articles on Bloomberg and elsewhere in the past week, discussing how speculators (which they classify as “smart money” – although I’m not sure how they’d know that, except possibly for the size of the trades) have been loading up on on the $VIX March (18th) 23 and 24 strikes calls.  The articles claim that market makers would be extremely short volatility at that level and could accelerate a volatility push to the upside should the March futures trade that high.

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