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

To: ViperChick Secret Agent 006.9 who wrote (32808)	1/12/1998 1:21:00 AM
From: Dwight E. Karlsen	Respond to of 58727

Lisa, re the same philosophy of jacking up can be done no matter where the option is...but something need to look at..) Very true...Monday morning all strikes near the money will get jacked; in the money's will be jacked also..it's just that no matter what, at the end of the day or as the market settles down, the strikes in the money will retain more as a % of the total option price...so even if the call that's in the money and costs $5 has $1 "flux" added due to volatile market, strip it off and you're still left with $4, whereas a $3 option which may be at or just out of the money gets $1 stripped away and you loose 33% vs 20%..so given the choice, I'd rather see 20% get stripped off than 33%..of course I'd rather not have to make the choice.. re and market movement - jack up price now you could have market movement and still not have high demand - theoritically- and they can still jack the price up just based on market movement I agree yes, because the MMs are just bookies, making sure the odds favor them..so their goal is, IMO, to price the option at a price at which they stand a better chance of making money than you do..but yet still entice you to buy. Particularly, I believe volatility is the main excuse to jack the premium...the MMs are trying to cover themselves, because they don't know for sure which way the stock will go...therefore on Monday both puts and calls will be expensive (already on Friday prices were being jacked up it looks to me). The only thing a person can do (aside from just paying too much) is sell quickly, before the price stabilizes and premium is sloughed off. But let's face it, they're going to make a killing on just the spreads, alone, even if they have to pay out once in a awhile. re most quote systems are not real time..even though they say they are...they are somewhat delayed. I daresay even Bloomberg has some delay. I'm not surprised to hear that. I know e-Schwab "real time" option quotes are pathetic if the quote times are right..often times the option quote is time stamped 20 minutes ago or earlier, esp. on options on a less liquid stock like Nokia. So you're stuck..if you signal your intent by placing a limit order lower than the ask, they sit on it and won't fill the trade order; trying to out-wait me (?). Funny thing is..a couple of times recently I got frustrated and was in the process of modifying my price, and even submitted the new order..then I get a confirmation saying my first order filled, and they canceled my modified order, I guess because they understood I didn't get the confirmation in time to see that the order had filled. DK PS - I tried to post this several hours ago, but was "bonked" out of SI.