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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Jacob Snyder who wrote (52573)	9/19/2001 4:50:59 PM
From: Sun Tzu	Respond to of 70976

The market maker is obligated to sell you at least 10 contracts at the offered price. So you can take this up with your broker. As for breaking up the order, it can work for or against you, depending on who does the back office. If you are dealing with a house that is also a MM in the option, then large orders work to your favour. Not so otherwise. good luck, ST Jacobe, 100 contracts?! You are a bigger pig than I ;)

To: Jacob Snyder who wrote (52573)	9/19/2001 4:54:08 PM
From: Ian@SI	Respond to of 70976

I believe if you put in a limit order for 50 contracts or less without other conditions, it is handled electronically. If your order is for 51 contracts or more; or it has special conditions attached, then it's handled manually. In a fast moving market such as today's, manual handling is most undesirable.

To: Jacob Snyder who wrote (52573)	9/19/2001 5:17:01 PM
From: Sam Citron	Read Replies (1) \| Respond to of 70976

Jacob, Is it your belief that you are entitled to a fill at your limit? You should be able to discuss this with broker and get time & sales on the contract. I've found Dreyfus to be very good in handling LEAPS, but have never gone after the volumes you are looking for. Whenever I have had a question about an execution, I have found it very easy to talk with Dreyfus and get reasonable answer. Sam

To: Jacob Snyder who wrote (52573)	9/20/2001 12:11:30 AM
From: LemurHouse	Read Replies (1) \| Respond to of 70976

If your transaction is 20 contracts or less, the "RAES"(retail automated execution system) should guarantee you an immediate fill if you are offering to buy at the ask or sell at the bid. For some options the RAES limit is higher -- as many as 75 contracts. I don't know if RAES applies to LEAPS, but I assume it does. When an order comes in under the RAES, the market makers are obliged to take the counter-position to your transaction...i.e., they must step up and buy or sell to you. If your transaction is too big for the RAES, then they are not so obligated, and you will be filled or not filled according to general market liquidity at that price. The RAES will (or should) guarantee you a fill at the best bid/ask currently posted on any of the exchanges, regardless of which exchange receives your order. If this doesn't happen you can challenge it with your broker and they will likely fix it retroactively. You are correct that "all-or-none" or other special conditions beyond simple limit orders take the order out of the RAES wheel and put it into the hands of a specialist on the floor, and you are no longer guaranteed execution. I would suggest that you either (a) break your 100 contracts into separate limit orders which fit under the RAES limitation and submit them sequentially;(but only if you are happy with the current bid/ask, and beware because the execution of your order will cause the price to move, espescially if you have stacked orders waiting to execute) or (b) work directly with the options desk at your brokerage to see if they can improve your price and if it makes sense to have them manage the order directly. As you are dealing with large numbers of contracts this might make more sense. While more expensive on the commission side, they can perhaps get you an extra .05 on the premium thereby saving you money. They might also be able to get thing done more quickly than if you are electronically feeding sequential orders into a moving market. FWIW. AD PS: So-called "RAES bandits" try to take advantage of the system by arbitraging the market -- submitting simultaneous, or near simiultaneous orders to buy/sell, using a small order to set a favorable -- but temporary -- price outside of the "normal" bid/ask, then entering a corresponding but much larger order or set of orders to exploit the temporary price that they have established with the "bait" order. This practice is prohibited by the exchanges and is probably illegal. Its posing some challenges for the RAES system, but RAES is still the rule as far as I know.