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Strategies & Market Trends : Option Spreads, Credit my Debit -- Ignore unavailable to you. Want to Upgrade?

To: jjs_ynot who wrote (1105)	1/8/2000 3:02:00 PM
From: KFE	Read Replies (2) \| Respond to of 2317

Leaps now marginable. Also reduced margin requirements on many advanced strategies. See: nyse.com Click on rules and changes. Check with your broker to make sure that they are going to allow you to take advantage of this. Regards, Ken

To: jjs_ynot who wrote (1105)	1/8/2000 5:49:00 PM
From: Jon Tara	Read Replies (2) \| Respond to of 2317

I ALWAYS use market orders on straight call or put purchases. But I am often buying when the underlying is moving, and I know I can't split the spread. My experience is quite the opposite of what you suggested (that "the MMs will rob you blind"). The specialists (not MMs - in options they are called specialists, and there is only one per underlying per exchange - just like exchange-listed stocks) have an obligation to fill up to 10 contracts at the posted price, and in my experience they always honor that obligation. With electronic order entry, this is virtually guaranteed, and, actually, if the underlying is moving, YOU can rob the specialist blind, because they often lag in updating their option prices when a stock starts moving. Once there is a trade, they wake up and move the quote, so you want to be the first one in. I don't want to blow it by trying to squeeze an extra 1/8 or 1/4. All that does is show the specialist that there is buying interest, and they will then update their quote and you will wind-up paying more. In short, an option order is almost the ONLY time I will place a market order to buy. I would NEVER do this with a NASDAQ stock. Sometimes I will do market on an NYSE order, though. That said, I do agree that a market order is really not the way to go on a spread order. They USUALLY aren't entered when the market is moving (my first QQQ order was an exception), and I suspect that the specialist is generally willing to be flexible for a spread. I figure if you toss them one full spread plus and eighth or a teenie, that should be good enough for them. :)