Options update for 12/17...I'm trying *real* hard to contain my anger.
For any of you who tried to trade options in Toronto today, my deepest apologies. I am embarrassed and livid by the ineptitude and unconcern shown by the management of the TSE today. Most option classes did not open for trading until about 11:30 and the last classes opened at 1:30PM!! This was due to the failure of what is known as the ARM (automated rotation module) network. This is the system that calculates and broadcasts our option prices. Now this system has been in place for some 12 years and is the backbone for our trading. My partner, who is somewhat of an early-bird, told staff at 8:15 that the system was acting 'wonky'. Of all days, today the 'tech' guy responsible for the system came in late; now, I don't blame him, but where is the back-up? Our screens were maddeningly black, but we were assured that the system would be up in 20 minutes. We were told this every 20 minutes for 1 1/2 hours after the opening! Finally fed up, I went and ran off some option pricing sheets (to give you an idea, the last date on this program was 1989) and opened BCE manually. Later, I did the same for ABX, but this was 11:30 for christ's sake. I don't know how many orders we lost to other markets (many), but I do know that a discount broker client who was trying to buy back closing some 30 contracts pulled his order as the stock kept rising. I really feel sorry for him. He lost money, I lost money, but more than that, the market lost integrity and viability. Inexcusable. If this were a private enterprise, this gang trying to manage the TSE would be shown the door tomorrow morning.
Now think about this...the system that failed is no more technologically advanced than the hook-up you now have with the internet to read this. They can't keep a LAN with about 30 pcs and one wire running! And yet, they blithely are planning to bring in a completely automated system with (at a guess) 15 gateways, thirty servers, and 4000 terminals all tacked together, and they think they can keep it patched together. Don't make me laugh. They want to decentralise use all over Metro Toronto, depending on cyberworks to make it all hang together, and they can't even keep a one trick pony working. I am not a Luddite by any means--I've been on-line for over ten years and I'm pounding away at my seventh computer, but I do realise the limitations of technology. To hang your hat on unproven technology and on a system totally inappropriate to our market is almost criminally foolish, in my humble opinion.
I want to repeat my basic point...any system which specifically removes the ability of a human being to exercise reason and logic, depending again on a convulted and unreliable patch-work network which has inefficiencies built in is not progress. It can only hurt the market. There are simple, workable alternatives which reasonable people have tried to talk the Exchange into considering, but they are myopic in their decision to automate completely. After 17 years of trying to create interest in and ensure fair trading in my option classes, I've reached the conclusion that if they go ahead with their wrong-headed bullshit, I will be forced to pull up stakes and move to a market that actually cares about its users---you and me.
Now, if you're still with me, on to the action.
BLD: Well, I'm awestruck by the move this puppy has put on in the last week. From the low 70s to 115 today. How high is high? I've never before sold 200 shares to 'hedge' my position, but I did today. I mean, 500 or 1000, but never 200. That's how scared I am of being off-side on this one. Still not much option activity, but when I marked-to-market tonight, I was astounded to mark some option positions to $45 dollars. Most of my _stocks_ don't trade that high. (52,52 and deserves much higher)
ABX: I did say I thought the rally would last another day or two, but I didn't think it would go this far. I still want to see bullion break above $292 before I'll go long again. (Sold my long at 25.90 average)
Sellers taking profits provided some welcome relief in call vol; we're down to about (48,47)
BCE: Funny action today; after a decent opening, sellers showed up and buyers took a hike until very late in the session. I'm hoping Bell breaks below $45, so it probably won't happen. (25,26)
N: For a while it looked like the fat was in the fire in terms of a takeover or at least something cooking. Although I didn't get a chance to post yesterday, some of you probably noticed the 2000 contract trade in May 32.4s, an opening buy, and buying in other series from heretofore unheard from brokers. I don't need a neon light to get the picture, so I bought a ten-pack of Inco yesterday which I gratefully put out today. Still more buying in the calls today. Remember what I said the other day...options activity will always precede any action by a third party. No such thing as inside information, and the watchdogs are toothless. I'm not saying a takeover is imminent, but where there's smoke there's fire.
Whew! Enough for today.
Somebody needs to put these idiots' feet to the fire!
Happy trading.
Porter |
