View from the Top - Larry McMillan


Five Questions for Larry McMillan, President, McMillan Analysis Corporation

November 2011


Larry McMillan could be described as a man who does it all; trader, teacher and author. He publishes The Options Strategist, a derivative products newsletter in its 20th year of distribution and three other newsletters. His Morristown, NJ, firm also produces analytical tools for serious traders and students of the options market and materials for Dow Jones and the CBOE Futures Exchange. As a registered investment advisor, Larry manages options trading accounts for a variety of individual investors.

A native of South Bend, Indiana, Larry studied mathematics at Purdue University and obtained a M.S. in applied mathematics and computer science from the University of Colorado. "When I was in grad school I read a book about trading convertible securities," Larry recalled. "It was pretty interesting, so when I got to my first job at Bell Labs I began doing some trading. One day, my broker called me up and said, 'Hey, there is this new thing called listed options, you ought to take a look at it,' so I did. Obviously, it hit pretty well, so I just got in."

"About three years later, I got a call from the same broker. He said Thomson McKinnon was looking for a retail strategist. I applied for the job and got it and that's how I ended up on Wall Street." Larry also worked as a strategist for Prudential-Bache before starting his own firm in 1991.

Larry's book Options As A Strategic Investment is now in its fourth edition, and he has written other books including McMillan on Options. His status and tenure in the industry make him a perfect choice for our five questions.

What is the biggest change you have seen in the options industry since you started?

"Well, there are a couple of big ones—like the increase in volume and advances in technology. But for me, as a strategist, the ability to trade volatility is huge. There was really no good way to trade volatility until that class of options came along, so I consider that to be the major development, certainly in recent years."

What has been your greatest challenge?

"I don’t know, buy low, sell high? Seriously, with publishing a newsletter there's a lot of work involved just staying up to date all the time. And—though options are more widely used now than when I started out—there are still a whole lot of people who don't really seem to understand them. Money managers, professionals, they understand but I think a lot of the general public, certainly a lot of the TV people, really don't, so you still have a lot of misconceptions out there."

What has been your personal proudest moment?

"I would say winning the Sullivan award was definitely the highlight for me."

What has been the impact of financial advisors' growing use of options?

"There are a few areas that have been affected. So far, advisors are using options primarily for protection. This is skewing the demand for puts and the supply of calls which is creating opportunity for institutional investors."

"Generally, advisors are less inclined to use options in a strategic way. Over time I think this will change and they will use options for more than simply enhancing stock positions, which is the major way they use them today."

Where do you see the industry in 2015?

"I think investors will become much more comfortable with trading volatility, hedging volatility and using these new volatility products. So I expect we're going to see a continuing expansion in this area, especially if the market stays anywhere near as volatile as it has been."


Name Lawrence G. McMillan
Position President, McMillan Analysis Corporation
Education B.S. Degree in Mathematics Purdue University (1968), M.S. in Applied Mathematics and Computer Science University of Colorado (1972)
First Job Developing software for Bell Telephone Laboratories
Honors 2011 Joseph W. Sullivan Options Industry Achievement Award
Wrote Options As a Strategic Investment, called the options bible
International speaker on options strategies
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