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To: ahhaha who wrote (22407)	5/19/2000 12:32:00 PM
From: LLCF	Read Replies (2) \| Respond to of 29970

Hey congratulations on your first REAL post... I'm glad that you seem to be someone who can enlighten us on some things... although, alas you seem to find more importance SOUNDING cool than being interesting : <Probabilities are not relevant since they are individual random variable instances. It's the product space of expectation that is relevant. Mr. Wynn is trying to control the expectation of many trials by adjusting the instantaneous to expectation. In his attempt to do so he moves the deviation back to the expectation and so neutralizes the profitability potential. He can't get very big in order to be able to do this. If he tries, he creates a state where his effort to extract the deviation moves the expectation away from its previous position so that his action is actually inefficient. This is precisely what happened to Merton's LTCM Aug '98. I've seen it happen on the floor. At the time I didn't think it was possible. The point is that mechanical adjustments to realize fiducial incremental returns must operate within strict bounds. The problem is that when humans do this repeatedly it goes to their brain and they develop an attitude of invincibility. That's when they start multiplying their scale and they find that they become the swing in the market. Size goeth before a fall.> Of course you could have just pointed out my incorrect extrapolation that Wynn accepts all bets by saying that he accepts millions of $1 bets, but not 1 bet for millions. <I will say that the options market is much more effecient than it used to be.>> <<O'Connor teach you this? It isn't more effecient(sic), it's more liquid so the nominal and theoretical converge more quickly.>> No, it's also priced more efficiently than it was years ago, sorry, you're wrong. <The public can play your short premium game just a swell as an MM. They aren't near so they can't execute as finely, but they can book to enter. The fatter premiums never gave me an advantage and you can't approach it that way. The clippers on the floor who do don't last.> Who said anything about any of this? <.. institutional option sellers [many times representing those with ton's of stock they want to write agains] are routinely taken down 20 OR MORE point on a VOL basis when they have size. You can pretend it's efficient if you want, whatever.> <<This is incoherent. Institutions write OOMs because it's essentially risk free, it's a 1/8 percent kicker on performance, and it helps the MM firms so that the soft perks flow.>> Again, you can ask what I'm talking about, or just claim it's incoherent... you clearly don't know what I'm saying... and at the same time shooting you own EMH in the foot by saying how writers are selling premium into the market risk free... exactly my point about smart option players buying cheap market insurance from dopey institutions.. wake up please! Since you didn't answer my elementary question [actually only elementary for "mr. put model"] about put exercise I find you asking me options questions a real hoot... espcially that one! E for exercise price? Shares in the 'big market' ha ha...and the SIZE you're tossing around.. you've been out of the loop for a while eh? See ya round dino dinosaur... call you're option friends and get that put question answered and I might answer your next abusive post... but probably not, it doesn't seem fair that I whip my info off the top of my head in 10 mins and you spend days digging up your info. DAK