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Strategies & Market Trends : From the Trading Desk -- Ignore unavailable to you. Want to Upgrade?

To: steve goldman who wrote (4621)	7/9/1999 6:50:00 PM
From: double-plus-good	Read Replies (1) \| Respond to of 4969

Steve, I was referred to your thread by an attentive reader on the strictly drilling thread. The question regards an executed options trade on thursday in flc 7 1/2 sept calls. From my immense hoard of 10 Sept 7 1/2 contracts, I put in an order to sell 4 at 2 1/2. My order represented the best ask and was filled around 3:25. The order was filled one by one which i found somewhat strange. I spoke with a waterhouse rep shortly thereafter to inquire concerning the commission schedule for partial fills on the option order. He said it wasn't strange and the regular commission schedule applied. When I got home there was a message on the machine from waterhouse saying the MM had cancelled the trade. In subsequent conversations, I was given no reason for the cancelled execution, only that the MM had canceled it at his discretion. My transaction was the only activity in the contract for thursday and at the time of the transaction i had the best ask of 2 1/2 which is where I was filled. Now I am not an expert in these kind of matters and i haven't read this board so you may have answered this kind of questions on numerous occasions previously. I would understand the cancel if the order had been filled at a price outside of the spread, but in this instance i don't understand the reasoning. Are the MM's really empowered to cancel trades without reason? The Waterhouse Rep had the gall to suggest that I too could cancel trades up to the day of settlement. Can I really cancel botched trades? I made a pretty poor trade trying to short HAUP yesterday. Can I really cancel the trade and get my dough back? Of course not. I don't see the reasoning here and would appreciate any input that would clarify. TIA brian (++good)

To: steve goldman who wrote (4621)	7/9/1999 9:08:00 PM
From: snoop dog	Respond to of 4969

Steve-- I didn't see anything printing to the tape at 121, so that's why I was really confused (I originally thought that LEHM was sitting on the bid and propping up the market, taking 100 share SOESes and refreshing while dumping stock on INCA and ISLD on the offer. Not that I'm an expert at this, but I've read this whole thread all the way thru now and am looking for stuff like that. It's a testament to the kind of education you provide here). One last thing--we've heard a lot about psychology making a successful trader. If you want to read a textbook on how NOT to trade, I mean violating every single rule in the book, read "Rogue Trader" by Nick Leeson, the guy who brought down Barings Bank. People think that this guy was a trader who simply got into a few bad trades. Uh uh. He started out losing, not cutting his losses, doubling down on losers, limiting risk etc. I mean, it's textbook. Steve, you may not need it but for anyone reading its a perfect example of how things get out of control. Anyway, thanks for the quick responses Steve.