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

To: Electric who wrote (37764)	3/31/1998 12:48:00 AM
From: Patrick Slevin	Read Replies (2) \| Respond to of 58727

Sorry about Utah. No, you aren't quite there yet with a grasp of S&P trading. It would be nice to get even one point on only 4 contracts each day in spoo trading. Some days it is very easy, some days it's is not. At any given moment in time there is a buyer and a seller of a contract. The only issue is price. There is a bid and there is an ask. But these bid/ask ranges are not set by MMs or specialists they are set by pit traders based on orders they have or by locals based on what their agenda is. (Please don't ask me what their agenda is...the simple answer is that their agenda is to make as much money as possible as fast as possible). So their are orders at any given point to buy (bid) and to sell (ask) and there are Market Orders. As these orders get filled/don't get filled the market moves up or down in the same fashion a NYSE stock would with an exception. The NYSE stock has a Specialist who is responsible for maintaining a fair and orderly market. The pits do not have such a person. So your Market order might be done over here for 1107.30 at the same moment mine is done over there for 1107.40 So Time and Sales is bouncing around like a ping-pong ball. If Donald, for example, has a fixed price that can only be exercised if the market hits 1107.20 then he waits. As soon as there is a trade at 1107.20 his order is now a Market order, and he may get a fill at 1107.20, 1107.10, 1107.00 ....wherever......depending on the action. So. I don't pay for anything special, because I do not get special treatment. There are good executions and poor executions, but in general it's pretty much the way I just described. It is not an orderly market, as the one on the NYSE is. Well it is somewhat orderly, just not what stock traders are used to. The value of my account is of no importance. Essentially it takes about 10,000 to control one contract. I know people who trade one and two lots as well as a few that occasionally trade 100 lots. It's all relative. I would think most people who trade the S&P contract stick to one and two lots.