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Strategies & Market Trends : Momentum Daytrading - Tricks of the Trade -- Ignore unavailable to you. Want to Upgrade?

To: Ken Wolff who wrote (783)	3/24/1998 11:27:00 PM
From: ojai	Read Replies (1) \| Respond to of 2120

Ken- Great thread! I was reading Stock Market Wizards II and thinking that option pricing gives an indication of the strength of a stock, so is it possible to use the option price of a stock to predict future value in a daytrading sense? Or are the option prices too removed? What about at expiration? I'm reading that a stock option has a tendency to expire at its strike price, so it seems that it would be good to know what that price is on expiration day. This assumes of course that the stock trades options and there are no other extenuating circumstances, like earnings or other news surprises which could effect the price. Your opinion? -ojai

To: Ken Wolff who wrote (783)	3/24/1998 11:56:00 PM
From: Darren	Read Replies (1) \| Respond to of 2120

Between this and your screen shot, am I to understand that you don't use level II boxes? That's a PC Quote feed and I see you have Level II access, but based on your description, I am inclined to believe that: a) the pause could just as well be from the data "waiting" to flow through the internet to your modem, b) reading time and sales as you described could lead to total disaster, especially when, for example this happens: Bid 20 1/4 Ask 20 5/16 20 1/4 20 5/16 20 5/16 20 1/4 20 1/4 ...INCA downticks BID ...GSCO downticks ASK New Low Ask Bid 20 3/16 Ask 20 1/4 20 3/16 20 3/16 <pause> 20 1/4 20 1/4 20 5/16 20 5/16 20 1/4 [Buy 1000 ALPO 20 5/16 GSCO] 20 3/16 ...GSCO wipes out all buyers at 20 3/16. New Low Ask. Bid 20 1/8 Ask 20 3/16 [Insert Frantic Sell Order here] 20 3/16 20 3/16 20 1/8 ... 20 1/16 ... 20 Just wondering... Darren darren@odessanet.com