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Politics : America Under Siege: The End of Innocence -- Ignore unavailable to you. Want to Upgrade?

To: Bilow who wrote (5608)	9/30/2001 5:44:28 PM
From: Qone0	Respond to of 27724

Where's your reply to my note that the short interest in CSCO only amounts to a tiny percentage of the float? If call one billion dollars of wasted capital tiny. I guess its tiny then. Do you think that options should be disallowed? Yes and no. Covered Options yes. Naked options no. Options are leverage and a zero sum game. Someone wins and someone loses on the price of the underlying stock. The trading of naked options is a motive for manipulation of that stock.There is a web site devoted to the max. pain theory of this manipulation. Do you think that market makers for options shouldn't be able to hedge puts and calls? They can do whatever they want in a covered market. Do you agree that eliminating short sales will make the options markets have wider spreads? No. No, I was stating that short selling has the effect of decreasing the amount of wealth transferred to traders (by decreasing the spread) on a per trade basis. Without short selling, you will see much wider spreads. That will eliminate (or reduce) a whole class of mid term traders, the ones who rely on market orders. Who uses market orders? Investors don`t. True daytraders don`t. Only momentum traders do. You're painting daytraders with a very broad brush here. I've known plenty of daytraders that were highly successful but never looked at an intraday chart. They traded completely off of level-2. Another group trade by watching the S&P500 futures, some of them also ignore the intraday charts. And there's another group of daytraders that trade baskets of stocks, they ignore intraday charts (of individual stocks) as well. But the most important group of daytraders you're ignoring are the scalpers, many of who don't use any charts whatsoever. Scalpers don`t use charts or L2? That`s news to me. To scalp a stock you have to be scalping in the direction the stock is moving. And they are not scalping MSFT for a penny on its spread.