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Strategies & Market Trends : Options for Newbies -(Help Me Obi-Wan-Kenobe) -- Ignore unavailable to you. Want to Upgrade?

To: Herschel Rubin who wrote (1621)	8/25/1999 10:46:00 AM
From: Madpinto	Respond to of 2241

I do not give advice on how to trade, and the information here should not be construed as such. That said, think of it from the point of view of those buying the calls from you. They (usually market makers) need to hedge the calls with stock or other options. If you dump all the calls on them at once, they have to trade a whole bunch of stock against it (unless they can spread it against other options in the pit). However, selling the options slowly may force a thinly traded stock down as MMs sell stock against your order, and the new bid for the calls could drop. It will be easier for MMs to buy calls if a big bid exists in the stock and/or if the stock seems to be moving up. If the stock seems stable, having an order "in the crowd" may give off-floor trading firms an opportunity to see your order and trade it. Your situation depends greatly on the stock liquidity and the MMs. The larger the volume in the stock and options, the more likely you can fill a big order. You can also "quote" the option by asking the crowd for the market on an order of a certain size. Your brokerage firm should help you with this. Another factor should be your opinion of the stock. If you are not concerned about any sudden declines, it may be easier to spread your sale over a few days selling ten at a time on RAES. In thinly traded options, MMs will usually catch on to what you are doing but may not care as long as they can sell their stock. Conversely, eliminating the whole position at once could end up saving you money if you have concerns about the stock. Good luck and congratulations!

To: Herschel Rubin who wrote (1621)	8/26/1999 3:00:00 PM
From: ----------	Read Replies (1) \| Respond to of 2241

As Madpinto already said, this isn't advice. Just a battle story. I had a large position of calls to sell. The option itself was not active, but the underlying stock was an actively traded NYSE issue. First go, I presented the full 1,000 contracts, day limit. (The technical term for this size lot is a XXXXload! <g>) Got 200 filled and the price moved away from my limit. Took about 2 weeks, but got them all done, never presented more than 200 on any given day after the first day. IMO, just as Madpinto explained, there was some laying off of the action occuring. I'd get a fill of 75, then 50 more, etc. Usually I got at least 100 off if any traded at all on a given day. It appeared to me the floor was willing to be accomadating, as long as the specialist didn't have to take the other side of a 1/2 million dollar bet. Personally, I can understand that REAL easy. <g> Regards, Doug