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Strategies & Market Trends : Trading the SPOOs with Patrick Slevin! -- Ignore unavailable to you. Want to Upgrade?

To: Gary E who wrote (3578)	2/18/2000 10:08:00 PM
From: Patrick Slevin	Read Replies (1) \| Respond to of 7434

The highest bid wasn't $800. It was higher. Think about it.

To: Gary E who wrote (3578)	2/18/2000 10:16:00 PM
From: Patrick Slevin	Read Replies (1) \| Respond to of 7434

We'll make it simple. There are 6 identical items. They all are for auction, and they all must sell for the same price. One at a time, 4 people come in to bid. One bids $800 for one. Two bids $800 for one. Three bids $800 for one. Four bids $800 for one. A fifth guy comes in. Bids $810, for three. His bid is higher, but he only wants three. So he is the top bidder and unless the other four all go to $810 he is top dog. All six must sell for the same price. Bidders One, Two and Three only bid $800. So they all go for $800 and Bidder Five wins out over bidder Four because he was prepared to pay more than Four was. In other words. If they all went for $810 then Bidders One through Four would have received nothing, and only three units would have Sold. Why penalize Bidder Five because he was willing to pay more but the others were not?