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Expected Returns (09:19)

By Lawrence G. McMillan

This article was originally published in The Option Strategist Newsletter Volume 9, No. 19 on October 11, 2000. 

Many sophisticated traders use ‘expected returns’ to analyze the profit and loss expectations of their investment strategies. In this article, we’ll define what that entails and then point out some of the benefits and difficulties in using such statistics to predict how a strategy will perform.

Protecting a Portfolio of Stocks (01:12)

By Lawrence G. McMillan

This article was originally published in The Option Strategist Newsletter Volume 1, No. 12 on June 11, 1992. 

With myriad investment advisors and the media trumpeting the fact that the market is overvalued, and with scary comparisons to the summer of 1987 abounding, an owner of stocks might justifiably be concerned with how he can safeguard his portfolio. He may not want to sell out his portfolio and go into an all cash position, but he would like to have some "insurance" in case the market takes a nosedive. Most investors in today's markets are familiar with the fact that index futures or index options can be used to protect one's portfolio. However, few know exactly how to adequately and correctly protect their portfolio of stocks. In this week's feature article, we'll describe the way in which one can compute the number of futures or options that would be needed to properly hedge his portfolio.

Larry McMillan Stock Market Update Video 5/18/2020

By Lawrence G. McMillan

Join Larry McMillan as he discusses the current state of his option-oriented stock market indicators.

Weekly Stock Market Commentary 5/15/2020

By Lawrence G. McMillan

A double top is now evident on the $SPX chart in the 2950 area. So for now that is strong resistance. The question is whether we're in a trading range or a stronger downturn is in store.

There are three important support levels: 2800, 2720, AND 2650. I feel that sellers would become more aggressive as each of these were violated on a closing basis. So far, none have been.

Larry McMillan Stock Market Update Video 5/11/2020

By Lawrence G. McMillan

Join Larry McMillan as he discusses the current state of his option-oriented stock market indicators.

Charting signals based on McMillan's “modified Bollinger Bands”

McMillan Volatility Bands are an alternative approach to John Bollinger's "Bollinger Band" study and developed by world-renowned options trader and author Lawrence G. McMillan. Given his background in options trading, it was natural for Lawrence to approach any volatility-based study in the same manner options are priced – using Black-Scholes definition of volatility.

Weekly Stock Market Commentary 5/8/2020

By Lawrence G. McMillan

Stocks continue to rally, as they have been since March 23rd. There was a rather sharp pullback about a week ago, but it merely pulled back to the rising 20-day moving average. After having touched it, $SPX is rallying again.

There is resistance at 2955 -- last week's high -- and it appears that might be challenged again soon. Above there, there are a number of resistance areas near 3000, including the declining 200- day Moving Average.

Larry McMillan Stock Market Update Video 5/4/2020

By Lawrence G. McMillan

Join Larry McMillan as he discusses the current state of the stock market.

Weekly Stock Market Commentary 5/1/2020

By Lawrence G. McMillan

$SPX managed to climb above the 2880 level this week and moved above 2900. Our initial estimate of resistance in the 2850- 2900 area was thus overcome, and the declining 50-day Moving Average was overcome as well. Now the next resistance level seems to be at 3000, which is where the declining 200-day Moving Average is.

SELLING OPTIONS: Naked or Hedged? (06:02)

By Lawrence G. McMillan

This article was originally published in The Option Strategist Newsletter Volume 6, No. 2 on January 22, 1997. 

In this article, we're going to take a look at the strategy of selling options. Just how profitable it is, and some of the considerations for naked selling or for using credit spreads. With option premiums inflated in many markets because of increased volatility, this seems like a timely topic. I'm not specifically including covered writing in this discussion, but since a covered call write is equivalent to selling a naked put, you can apply any of the commentary that pertains to naked put selling.

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