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To: Kayaker who wrote (72693)	10/16/1998 7:15:00 PM
From: nihil	Read Replies (2) \| Respond to of 176387

RE: Options trading There are several different options exchanges (CBOE, AMEX, Philadelphia) and each series is listed on one. I think all of them use open outcry and have MM's who live by buying at the bid (low -- making the market order seller pay the spread) and selling at the ask (high making the buyer pay the spread) and taking the spread on purchases and sales (they are "scalpers" who own or lease a seat on the exchange) and "make markets." They rarely have big positions (too much risk) so they can sell an option for a reduced spread (even a teeny) if they have nothing else to do, or if they are long too many of a certain strike and date. They would rather not have public traders (you and and me) take the spread, but there is nothing they can do to prevent it without colluding (fixing prices). When you really want to fill, you can usually save money by putting out several small orders at slightly different prices realizing that not all of them may be filled, but I think you will be pleased at the improved odds that come from using close limit orders. Keeping your spread small may make it possible for you to make money trading actively, selling calls after a rise, and puts after a fall, and buying them back when the price reverses. Much more comfortable than holding large positions into expiration.