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Strategies & Market Trends : Canadian Options -- Ignore unavailable to you. Want to Upgrade?

To: gordon m. who wrote (780)	12/10/1997 7:31:00 AM
From: Porter Davis	Respond to of 1598

It's Lawrence MacMillan, not Robert...thanks Li-Fan Chen for pointing it out. Guess that proves I don't have any connection with the author. Once more: the numbers in parantheses are the implied volatility for (calls,puts). We work these out 'backwards'; ie, we try different values until we find the price at which buying or selling is occuring. The tricky part for us is when these forces move the number. We have to be nimble enough to change our vols to match what's happening in the market. Otherwise we get steamrolled. I guess you could compare it to the line on a football game. The odds-makers set a line, but injuries, weather, and plain sentiment can make action one-sided, so they move the line. Our goal is to find the price where buyers and selllers are roughly in balance. Gordie asked how I determine how I trade a stock--tech analysis, etc. I am a trader, not an investor. I have an overall opinion on the market (not that it's always right!), and a specific idea about my stocks, but that's just the background...I trade constantly during the day, looking for short-term moves...as short as five minutes. Since I work for myself (no salary or benefits), I have to trade to eat. I see overseas is down sharply this morning. Should be an interesting day. Happy trading. Porter