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Strategies & Market Trends : Option Spreads, Credit my Debit

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To: KFE who wrote (908)9/17/1999 8:56:00 PM
From: jjs_ynot  Read Replies (1) of 2317
 
Ken,

Option market makers and professional option traders
(non-retail) generally make their money by trading implied
volatility and being delta neutral but I don't believe this type
of trading is practical for the retail investor due to transaction
costs.


The MMs are indeed market neutral. They actually make most of their money on the bid/ask spread and try to stay positive on gamma. At least that's what the people I know on the Philly optin exchange tell me.

Dave
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