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Politics : Ask Michael Burke

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To: Knighty Tin who wrote (69690)	10/28/1999 3:00:00 PM
From: AurumRabosa	Read Replies (2) of 132070

MB, Not quite as bold as you but I did pick up some OEYXL Dec 660 puts at bottom tick so far today. The funny thing about pricing options is that closing prices don't fairly represent the action during the day. As I watch bid-ask during the day it paints a very different picture. They dropped VIX down to about 22 while they increased the IV on index puts. Not sure how they pull that off since VIX allegedly includes at-the-money near-term calls & puts. Very sneaky, what a racket these MMs have going. As the market jumps up they drop the call IV so one won't get as much leverage as they'd hoped for when they go to cash in. At the same time they increase the IV on puts so that when the market corrects and they subsequently reverse the process and decrease the IV you'll get short changed. I wonder how many people got filled on market buy orders for calls this morning and still ended up paying top tick? Any tips on how not to over pay for your options?

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