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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: Esteban who wrote (6733)	2/14/1998 1:49:00 PM
From: Greg Higgins	Respond to of 14162

Estaban writes: Does this mean there is a limit order display rule similar to the new Nasdaq rules for stocks that require the MMs to display your order as the best ask/bid if they choose not to fill it. Truthfully, I don't know for sure that there is, but I believe there is and if I don't see my bid or ask reflected I call my broker and tell him to tell the floor to either fill or reflect. I went thru this just the other day, the bid ask was 1 15/16 - 2 5/16. I bid 2 3/16 and the bid went to my bid briefly (2 seconds) and then dropped to 2. I didn't see my trade show up on the volume, however, so I called my broker. He checked and said I hadn't been filled. It took another 20 minutes or so, but they finally reflected me. In this case, I lost because what I really wanted was a fill inside the spread. Some folks are very aggressive and always ask for 3/4s of the spread. They claim they get it; it's never worked for me. I'll get the price, but only after the stock moves. I always ask for 1/4 - 1/3 of the spread on an opening position, unless we're talking a volatile stock and then I open the position when I like the stock price relative to where I want it to end up. Also, if the spread is narrow 1/8 or 1/4 on higher priced stocks, I just don't bother. I go in with a limit bid at the current ask or a limit offer at the current bid. In any event, I never open with a market order. I don't know the minimum option contract amount. Assume it's 10. I've heard, but can't verify, that on some options the bid ask is for 25 or 50 contracts. I assume this latter applies to things like OEX, but I suppose certain stocks like MSFT or IBM might do enough volume to justify the higher amounts.