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To: Geoff Nunn who wrote (72630)	10/16/1998 3:19:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 176387

Geoff, Am I correct? Yes, and I suspect (although I don't know for sure) that the reason is that a lot of these options are written on spec. For example, does buying buying a call option require that someone has actually previously written it, or does the market maker simply take the other side of the option and acts as a clearing house. I hope I'm being clear on this. TTFN, CTC

To: Geoff Nunn who wrote (72630)	10/16/1998 5:26:00 PM
From: nihil	Read Replies (4) \| Respond to of 176387

RE: Are you correct? No. I have not bought an option at the Ask or sold one at the Bid (except in dire emergencies) in months. I routinely do better on spreads by rolling my own (keeping up to 90 per cent of both spreads). Use a +/-1/8 difference on the > $3 options and +/- 1/16 on cheaper options. When you want to buy an option offer 1/16 more than the bid, and you will become the market bid and get the next market order. Check and see if your offer becomes the market bid (if not sue!). There are usually many market makers, some of whom will be happy to make a teeny if they are too long. Collusion cannot be organized just to cheat you out of a point. Scalpers are competing to make trades to maintain their lifestyles. If you are the bid, you will be filled, the new bid will drop, and the market will stumble on.

To: Geoff Nunn who wrote (72630)	10/19/1998 11:40:00 AM
From: jim kelley	Respond to of 176387

Geoff, Options are very expensive now. There is a high volatility premium to be paid. You might want to wait until the volatility subsides before you reach for a 6-pack of options. As far as the spread is concerned, it seems to be the widest in the options that have the lowest per day volume. You can always offer less than the ask and you may get your fill. The main issue with options is to be confident that the stock is going to hit its target by expiration. If you are not certain then you can use a spread to distribute your risk. Also, if you do not have a cast iron stomach, do not purchase options due to expire in the next 30 days that are way out of the money. Regards, Jim Kelley