USRX Message Board - Msg: 1075949

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Technology Stocks : USRX

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To: David Rosenberg who wrote (16890)	3/27/1997 9:00:00 AM
From: Glenn D. Rudolph	of 18024

David, ROFLOL...first of I meant to type NWX not NWC. I noticed it much later but my edit window time was closed. Nothing to do with the issue, however. It could have been any under lying security or index. We only dissagree on one issue which of course, makes us dissagree on the devide by two issue. You are assuming for every buyer there is a seller and vice versa. I do not believe that to be the case. The market maker can and often does carry positions but his/her positions are not counted in the open interest. The market maker has to guarantee payment or assignment on all open interest contracts. This makes for a liquid market. However, the market maker cannot possibly personnally have the financial resources to cover all positions so the bid and offering will very depending on if the market maker would prefer additional open interest or not. The market maker is "selling off" some of his extra postions to other investors so as to not be too much one sided. Similar to what a booky does. I still believe the open interest is the total amount of open contracts by investors not including that of the market makers. Glenn PS How do we get a definitive answer ont his? How about if I write to the AMEX and the CBOE?

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