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Strategies & Market Trends : Canadian Options

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To: Tommy D who wrote (847)	2/26/1998 7:15:00 AM
From: Porter Davis	Read Replies (2) of 1598

>>My experience with other options has not been as good I'm sorry to hear that. Let's take a look a some of the issues you raised. What exchange are Wascana options listed on? You stated that you were the open interest on that series. As I posted earlier, if there isn't sufficient open interest and average daily trading volume, it's best to look elsewhere. Loss of opportunity is better than loss of capital. The TXO/referendum episode was truly a debacle. I was chairman of the options floor procedure committee at the time, and we were concerned about the ability of the system to handle the expected volume. We had 'war-gamed' the various possible scenarios and felt we were as prepared as could be. Unfortunately, we were wrong. The sheer volume of orders was compounded by the deluge of CFOs, which meant the specialist had to go through huge stacks of little pieces of paper to find the order and change it, and this would affect the opening price. We had asked the exchange to help us develop an electronic book years before this, but received no assistance. You have to understand that everyone was trying to get through the same door at the same time. >hitting the offer and having the bid automatically increase with no corresponding increase in the stock is also tough to take... I must confess I don't understand this sentence. Virtually all the options in Toronto are on 'auto-pilot' where the quotes are automatically rotated whenever the underlying equity's bid-ask spread changes. About the only time I change one of my quotes is to move it closer to an incoming limit order, trying to encourage trading. >You seemed hostile... Sorry I sounded hostile. If you really want to hear me being hostile, go back in the thread to where I discuss the current TSE management. Happy trading. Porter

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