By Lawrence G. McMillan

Join Larry McMillan as he discusses the current state of the stock market on February 21, 2023.

By Lawrence G. McMillan

Stocks have struggled since the beginning of the month, after having traded at resistance at 4200. $SPX has fallen back below the previous breakout level of 4100. Any close below 4070 would be the lowest close since January, and that would be a further negative for stocks. $SPX has probed down towards that level a few times, but has bounced back up each time. Still, a close below 4070 would open the door to a retracement of the entire previous trading range -- down to 3900, or 3800 on a more extreme move.

By Lawrence G. McMillan

Editor’s note: trader and mathematician Michael Greenbaum is famous in the world of option trading as the firm he founded – O’Connor Associates – became synonymous with the highest level of derivative trading based on theoreticals and modeling. It eventually was a major player in nearly every form of derivatives arbitrage practiced on Wall Street.

By Lawrence G. McMillan

This article was originally published in The Option Strategist Newsletter Volume 8, No. 13 on July 8, 1999. 

After having spoken at many conventions and seminars, I would say the most common general question that I am asked is “Should I be a speculator or should I trade hedged positions?” There is no pat answer to that question, for part of the answer depends on the individual’s penchant for what he feels comfortable doing. That aside, it might be enlightening to look at the track records of The Option Strategist hedged portfolio and speculative portfolio as a means of determining at least some of the factors that one would use in making the determination as to whether to be a hedger or a speculator.

By Lawrence G. McMillan

Join Larry McMillan as he discusses the current state of the stock market on February 13, 2023.

By Lawrence G. McMillan

I met Mike Gallagher shortly after I joined Thomson McKinnon Auchincloss Kohlmeyer (TMAK) in 1976. Mike ran the Thomson operation on the floor of the CBOE at the time. Later, as I progressed to trading the TMAK arbitrage and option proprietary accounts, Mike and his partners were our main floor brokers on the CBOE. I talked to Mike recently, and asked him about some of the early days at the CBOE 

By Lawrence G. McMillan

Bear markets are tricky, and if what we are seeing now is the continuation of the bear market, it is exhibiting some of the actions that are designed to fool most of the people most of the time.

By Lawrence G. McMillan

This article was originally published in The Option Strategist Newsletter Volume 2, No. 7 on April 8, 1993. 

Many strategists like to position themselves so that they can make money when the underlying security swings wildly, rather than having to scramble as naked option sellers must during such wild price swings. One strategy that allows the strategist to do this is the "backspread". In general a backspread consists of selling an in-the-money option and then buying a larger quantity of out-of-the-money options, all on the same underlying instrument. Some traders even use a broader definition, preferring to use the term "backspread" to refer to any strategy in which one can make money on large price moves; by this alternate definition, straddle purchases and combination purchases would qualify as backspreads as well. For the purposes of this article, we will stick with the first, more restrictive definition.

By Lawrence G. McMillan

Lawrence G. McMillan recently was a guest on Chuck Jaffe's Money Life podcast where he discussed the current state of his option-oriented indicators and his stock market outlook. Listen to the full interview by clicking here. 

By Lawrence G. McMillan

Join Larry McMillan as he discusses the current state of the stock market on February 6, 2023.