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Strategies & Market Trends : Canadian Options

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To: Porter Davis who wrote (1453)1/16/2000 11:52:00 PM
From: Lloyd R   of 1598
 
Thanks for the info Porter. I've always wondered how the specialist "make" their money. No one seems to talk about it much. Some other questions though...(since no one else is aksing any :)

What option model do most specialist use? Binomial, Black-Scholes(sp?) or their own proprietary one.

By being a "specialist" for Ballard and BCE, are you REQUIRED to make the market if their are no buyers/sellers? If so, there must be some situations where you just can't win, or is there always a hedge that you can win with - LT or short term.

On average, what do you think is a good return and time to get out?? I have been burned a few times by making 2x or 3x gain, then waiting for that extra gain to come, only to watch my position go down to a 0.5x loss. I know discipline is the key, but I was wondering how you guys decide when it is time to close your positions.

Thanks for the info again!
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