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Some Practical Considerations for Option Traders (07:06)

By Lawrence G. McMillan

This article was originally published in The Option Strategist Newsletter Volume 7, No. 6 on March 26, 1998. 

In the course of conversations with other traders or customers, there will occasionally be subjects that come up repeatedly. In this article, we’re going to look at three of them – sort of an article of short subjects. The first is probably the most complicated, as it addresses what volatility to use when trying to project the profitability of an option position. Second, we’ll share some practical insights on trading in futures options – particularly in the New York markets. Finally, we’ve had a lot of questions about one particular usage of our oscillator, so we’ll address that topic as well.

Things Could Really Get Insanely Bullish (Preview)

By Lawrence G. McMillan

In the November 1929 - April 1930 rally, stocks rose 48% and volatility (all that we have to go on from that time period, of course, is realized/historic volatility) dropped from 112% to 8%!! Then we all know what happened after that: the wheels came off, and the market made new lows by October 1930, and the rout was on.

Larry McMillan Stock Market Update Video 6/1/2020

By Lawrence G. McMillan

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

Weekly Stock Market Commentary 5/29/2020

By Lawrence G. McMillan

Stocks broke upward out of the trading range this week, and have made new intraday highs for this rally each day since. Thus, the rally that began from the extreme oversold conditions on March 20th remains intact. There should be support in the 2940-2950 area, which was the top of the recent trading range. As for overhead resistance, the 200-day moving average was supposed to offer resistance, but so far it hasn't.

How Much Should You Risk? (13:13)

By Lawrence G. McMillan

This article was originally published in The Option Strategist Newsletter Volume 13, No. 13 on July 8, 2004. 

This subject of risk is one that we have addressed in the past. In this article, we’ll not only review the basics of risk management, but will also introduce a more advanced technique designed to even better assess your risk and adjust your position size accordingly.

There are two facets to trading: position selection and risk management. Many traders feel that the latter is more important than the former. In fact, some have gone so far as to say that any reasonable method of selection will work as long as one has an excellent method of risk management.

Weekly Stock Market Commentary 5/22/2020

By Lawrence G. McMillan

The action over the past few days has been just above those old relative highs at 2955, but has certainly not been a true breakout from the previous trading range. The high this week was 2980.

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.

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Trading or investing whether on margin or otherwise carries a high level of risk, and may not be suitable for all persons. Leverage can work against you as well as for you. Before deciding to trade or invest you should carefully consider your investment objectives, level of experience, and ability to tolerate risk. The possibility exists that you could sustain a loss of some or all of your initial investment or even more than your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and investing, and seek advice from an independent financial advisor if you have any doubts. Past performance is not necessarily indicative of future results.
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