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Technology Stocks : Dell Technologies Inc.
DELL 135.98+3.0%3:59 PM EST
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To: Eddie Kim who wrote (73328)10/21/1998 8:46:00 AM
From: Chuzzlewit  Read Replies (1) of 176387
 
Eddie, thanks for the link. He confirmed one thing that I contended that you were critical of: that market makers establish balanced positions (equal number of puts and calls written or purchased at the same strike price) and earn their money on the spread (which, as Geoff Nunn pointed out can be huge). If this is true, there is no reason for market makers to try to move the market as options expire, since the price of the stock is irrelevant to them.

Herm goes on to say Big money buys and sells blocks of stock which impacts the stock price and the confidence of the investors. They can start a stampede or pug up a hole in the dam. They can first move on the options and then drop the bomb in the stock price depending on what is easier to impact.

This statement is true, but irrelevant to the issue at hand. It also skirts the issue of profitability.

TTFN,
CTC
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