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To: Daniel Goncharoff who wrote (4217)	5/18/1998 3:48:00 PM
From: Robert Graham	Read Replies (1) \| Respond to of 12617

From my understanding, an automatic execution system will run up to an order of 5 contracts at the current quote. Basically, it is holding the MM to their published quote. I do think firm quotes are a requirement for the options exchange. Think of it like the SOES system of NASDAQ which is another electronic execution system. The SOES will take the current quote of the MM and then allow the MM a small period of time to update their quote before the next order transacts against their published quote. Do I have this correct, Steve G? There is certainly someone to take the other side of the transaction. That is what the MM is there for. The MM provides this liquidity function in the marketplace. There are likely multiple MMs between the floor of the CBOE and other exchanges like AMEX for this option. The MM will adjust their quote in consideration of their risks involved with the current activity on that option, upon consideration of where the price of the stock is at in relationship to the strike price of the option. Right now, I am attempting to sell the option at one month out 1/8 below the intrinsic value of the option. I do not think this should be any problem. Bob Graham