John, during 1997, I traded optiions about 300 times, and expect to
double that in 98. Most of the time, when I trade options, I have my
fingers crossed.
Many times, the option that offers the best return, has the lowest
volume, and can be a risk. My last check at 3:27 yesterday on MUBY,
Feb 27.5 calls, had only 18 contracts traded. What happens to a large
order of 30 or more contracts? Do you go market and get ripped
off, or limit, and possibly miss the play?
I normally trade in units of 10 contracts to limit my risk, as I feel that
I am at the mercy of the MM's (or whatever they are called). I always
thought that the specialist had to honor up to 10 contracts on the bid
ask, and learned this week, that they are only required to honor one
(1) contract!
I expect most of my trading to be long or short stock, because of the
liquidity. Even then, the stock can move too fast for me. When I covered
yesterday at market, the stock ask was 32 3/8, but x number of shares
were covered at 32 7/16, and y number of shares covered at 32 1/2.
There wasn't enough stock available to cover all of my order at the
lower price.
But such is the life in the fast lane! <gg> That's MU.
Patrick |
