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Strategies & Market Trends : Options 201: Beyond Obi-Wan-Kenobe -- Ignore unavailable to you. Want to Upgrade?

To: Esteban who wrote (1014)	5/5/2004 1:09:39 PM
From: Dominick	Read Replies (1) \| Respond to of 1064

Wide spreads are a PIA. I've seen MM's raise the offer 20 cents or more and the bid stays the same. With this kind of option, I first have to believe the stock is going to make a significant rally,(for calls), using TA methods. If possible, I'll wait until it starts declining to a support area when the b/a narrows and the price drops during the decline. You'll have a better chance at getting it cheaper. With YHOO now at 53.61 and May 50 at 4.20b/4.40a, your costs are $79 per contract due to being ITM. IV = 45.18% and 0.93 delta. YHOO has to move at least 4.8% to break even. If buying calls I don't think it will make it. It's already hitting a resistance area. dom

To: Esteban who wrote (1014)	10/20/2004 12:46:25 AM
From: LLCF	Read Replies (1) \| Respond to of 1064

<Yhoo: 53.68 bid 53.69 ask May04 50 calls bid 4.3 ask 4.4 May04 55 calls bid 1.3 ask 1.35 Sounds like Yhoo stock might even be closed. 1c wide seems unusual and even if real, once the option market maker starts pounding away on the bid the market makers [stock] run away. The markets [options] on the exchange often have to be hundreds on each side [tens of thousands of shares] for the big guys... if they make markets much better than those above they'll just get killed: 4.3 4.4 is a GREAT market. DAK