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Strategies & Market Trends : Canadian Options

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To: kajtek who wrote (13)	1/22/1997 7:49:00 PM
From: Porter Davis	of 1598

Job description of an options specialist: I provide continuous two-sided markets on every series of my stocks. Less than 5% of all in-coming client orders trade with other client orders in the book, so it is my job to take the other side of those orders. I hedge by buying or selling other series or by trading the underlying stock. One point I'd like to make to all options players who trade Toronto--we have a computer program which calculates and rotates our series instantly when the underlying stock price changes. If you then enter a buy order where they were offered, you might think we moved the market away from your order...not true. We don't verbally change a market very often, and never away from an incoming bid/offer. If I don't trade, I don't make any money. Actually, I can't say it never happens, but I've never done it. Check the open interest figures for any stock you're interested in. If it's low, be careful. For example, it's a mystery to me why Bell doesn't trade better. The same guys who call the Bell markets also run the ABX book, so it's not like we're afraid of trading. We just can't get consistent order flow in Bell. Oh well. Good luck and happy trading. "Mind the gaps!" Porter

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