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Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Peter Church who wrote (12012)	7/29/1998 2:51:00 PM
From: umbro	Respond to of 164684

On falling options premiums, the more AMZN treads water, and it price volatility is lower, the more they'll suck premium out of the options (meaning the bid will drop, even though price of AMZN trends down slightly). Market makers have a lot ways to take your money. Could get worse before it gets better. This is why some folks were selling calls instead of just doing an outright short: time decay and droppping premiums work in their favor.

To: Peter Church who wrote (12012)	7/29/1998 3:59:00 PM
From: Marconi	Read Replies (1) \| Respond to of 164684

Hello Mr. Church: AMZN: Today I bought the Aug/120 put when the stock price was 2 points higher. The put is now quoted at the same price after being almost 1 point lower. Are the options prices really inefficient or What? I have talked with CBOE in the past. They often will tell me that without a change in the bid or ask, they do not reprice the options. If you price off the bid - ask, then they often seem to move the price against that new information. Other points: They can take 1/4 point of parity from any option traded on CBOE without triggering their internal trading rules. Their rules date to July 14, 1973 when they opened, and it was a much different information world then. Unless options are heavily traded and thence liquid, it is hard to say the options market works in the public investor's favor in the way it could--an efficient way to smooth income and manage risks. It seems it is more of a barrel of snakes, stacked in the traders favor at the expense of the public. Note the CBOE is buying out the Pacific options exchange--the members were grousing about having to pay for the (Pacific) floor, but were glad to be eliminating a competitor. I baffle at why SEC Chairman Arthur Levitt blesses such concentration of power when he is one of President's Clinton's prized appointees from the industry championing the interests of the public investor...? About the best I can say about options trading is to be careful that the major trend is with you, don't count on narrow margins--the MM's have the right and will take them (and from direct experience, 15 traders in a pit are not enough to competitively price options in a day's trading--which implies to me a clubby collusion at the expense of the market and public. Arbitrage should be able to break a 15 trader circle--but IMO it is not going to occur from within the options exchanges--maybe something equivalent to the SOES bandits could arise....) Best regards, m