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Strategies & Market Trends : Options 201: Beyond Obi-Wan-Kenobe
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To: Dan Duchardt who wrote (980)4/16/2004 9:20:53 PM
From: Steve168  Read Replies (1) of 1064
 
Dan, your detailed answer is deeply appreciated.

I noticed the option bid and ask spread is pretty big percentage wise to the premium. For example, a 10 cents spread on a one dollar option is 10%. Does the discount brokers show our bid to the market and may execute it if another customer want to take it? One friend said one can only buy at the ask and sell at the bid, the spread is market maker's cash machine. Is this true?

Did anyone had buy orders filled at bid price, or sell order filled at ask? What broker is that?

My model is telling me the market is very close to the top and down side risk is the highest in over two years. I am planning to buy some QQQ puts. Any other instrument I can use if I believe the market is going down at least 10%? I heard about futures but not sure how it compares with options/puts.

Thanks for any answer/comment.
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