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Strategies & Market Trends : Tech Stock Options

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To: sean sanders who wrote (58330)	2/1/1999 2:27:00 PM
From: James Joyce	of 58727

Thinly traded options often will have no buyers or sellers at the price you would like. However there may will almost always be buyers and sellers at a price discount or premium. If you are willing to pay a high price for a call then there will be someone willing to sell it to you but you would end up paying a price you might find unattractive. Best option in this case is to figure out what price you would be willing to pay and then put in a bid. The market will sort out the trade for you or you will get no trade. Same situation happens on both buy and sell side. If there is little liquidity in the option then you have a high risk of not being able to close your position when you want to while the stock is moving on you. example: if you buy jan 00 xyz calls and want to bail out after the stock drops a few points you may find that there are no buyers at all for the jan calls except at a very low price. As a new options trader you may want to consider trading some more liquid options. Suggestion : invest the $50 or so on McMillan's book "options as a strategic investment" as it will cover this for you. Good trading: James

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