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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!

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To: Herm who wrote (10965)	6/5/1999 7:48:00 PM
From: Jon Tara	Read Replies (1) of 14162

I wouldn't put much creedence in a simulation, though. Even though they say that they try to simulate real market conditions, so you won't always get an execution, it's still not the real world. Your trade is affecting the market, and the simulation can't take that into account. (without altering yesterday's data to take into account your trades). I also wonder if the simulator really takes into account the probability of getting an execution on a particular stock. I do think that all bets are off for NASDAQ. Too much funny business goes on with MMs, and I think it would be darn hard to simulate. BTW, I seem to have detected even options specialists "backing away" over the past few days. I trade in-the-money options, typically 1-2 strikes in the money. They typically have a large spread and little volume (I'm often the only buyer or seller that day) and so I just buy at the offer and sell at the bid. I've noticed particularly when placing closing sales, I'd put in an order to sell at the bid, and the quote would immediately back off by 1/8. Does the simulator simulate that? :)

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