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Strategies & Market Trends : Point and Figure Charting

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To: Challo Jeregy who wrote (5576)	8/9/1998 1:16:00 PM
From: james ball	Read Replies (3) of 34811

Tom Dorsey to Challo, It is not a matter of whether there is a person who wants to buy a call from you or not. There are market makers who must make the market in these options and must stand behind a bid and an offer no matter how bad a stock looks fundamnetlally or technically. I am in a hedge fund that 1-2 of it backs option straders on the AMEX. Since they trade for now commission and have very easy margin requirments they can make a lot of money simply by buyng on the bid and selling on the offer. They also take advantage of overvalued and undervalued options by putting on volatility spreads and hold until time erodes premium. Again they are the only ones with the edge that can do this. By having this edge they create volume which helps facilitate your option orders. If you sell a call on a stock and the stock is above the strike price on expiration the Option Clearing Corporation will take the stock. It's not a matter of whether there is someone investor that wants to buy a bad stock. Understanding the option business will give you tools to better manage your portfolio's. Above all in options, KEEP IT SIMPLE!!!!!!!!!!!!!!!!!! Tom

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