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

To: Dan Courtemanche who wrote (1246)	7/10/1998 9:42:00 AM
From: notredame	Read Replies (2) \| Respond to of 1598

Big decision in the FP this morning. Philip Environmental has the right to receive names and addresses of pseudonym posters in the Yahoo chat group. Watch out, Big Brother is coming.

To: Dan Courtemanche who wrote (1246)	7/12/1998 1:53:00 PM
From: Dave.S	Respond to of 1598

Dan: Sorry, I was showing some visitors from England around town this week and I was unable to answer your question. There is no straight answer to this question - it depends on which option series and which option class you are discussing. A large open interest doesn't really drive the liquidity of an option class. For example one institution may put on a position of 2000 contracts and this could be the entire open interest. I know from my experience in trading on the floor which market makers are usually capable and willing to take on large positions. For example I frequently trade 100 to 200 options of BCE and can usually get in and out of this size with no problem. This is because the three MM's who handle this can easily hedge by trading 10,000 to 20,000 shares of BCE. This is the case in most of the banks, NNC, NTL, and ABX. The TXO's are always good because there is a large group of Future Locals in the TXO pit looking to trade against the clients. The stocks which are thinly traded (such as HUM, MG.A and CSN) can only support trades of 10 to 20 options. I have sometimes faced difficulties getting out of large positions but try to avoid stocks which are difficult to hedge. The Toronto options MM's guarantee a fill of 10 options at their bid or offer prices. These fills are automatically done for the clients using the MOST system. The MOST order is received by the clerk at the options post and is announced by the clerk. If another trader wants to better the MM's price they have this opportunity but this is generally not done. Some options classes have a minimum guaranteed fill of 20 contracts. If you want my comments on a specific option class in relation to liquidity and size of trades possible, feel free to ask. Dave