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Politics : Ask Michael Burke

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To: accountclosed who wrote (35377)	11/6/1998 5:10:00 AM
From: Skeeter Bug	Read Replies (1) of 132070

antoine, isn't this a long explanation of supply and demand? the mm is the buyer and seller of options to the public. he takes into account the retail buyers and sellers and adjusts prices based on the position that the mm wants to take. i realize there are complexities that may arise where a mm may want to keep more or less inventory than normal, but that seems to be the basics. if mms keep prices artificially low (not equal to supply and demand) then their inventory will liquidate. if they are artificially high then they build inventory. figure in the various spreads and, at its basic level, it isn't all that complex. basic microeconomics. perceived cost vs benefit of various inventory levels.

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