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Politics : Idea Of The Day

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To: ViperChick Secret Agent 006.9 who wrote (18094)4/26/1998 2:35:00 PM
From: Thomas Winklhofer  Read Replies (1) of 50167
 
Sorry for delay, Lisa.

> for options -it depends on how much of a movement your system will "predict"

On RUT the average win is 5 points. My system doesn't 'predict' like Kevin's MF tool does. My risk management provides exit points looking for support and resistance levels.

> with the futures...all you need is a point or two

Yes, of course your possible loss isn't limited. With futures you get rid of the spread problem which you have with options. But the spread cash/future is varying due to market situation and can kill your profit that way.

> on the SPX they keep the spread wide...but occasionally I see it get
> down to an 1/8....I always say they dont know which way the market
> is going right now....but I dont know that this is the reason..
> maybe they are just trying to unload a position....

I think its just a MM trick to attract option sellers before an expected move. I saw this several times that immediately after a filled bid the ask was raised scalping the option buyer afterwards.

When the MMs do not know which direction the market will go, I would expect a big spread when the vola is high.

Thomas
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