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To: Eddie Kim who wrote (72952)	10/20/1998 9:41:00 AM
From: divvie	Read Replies (1) \| Respond to of 176387

Eddie, I'm not disagreeing with you here but am interested in what the most profitable scenario for MMs is. I have seen numbers that say 80% of options expire worthless and someone here saw 95%. That being the case then, statistically, it would be more profitable to write both puts and calls instead of betting one way only by buying calls and selling puts for example. If this is true then what Chuzzlewit originally said when he said that for the position to be profitable then the price should not move may be true. If it does begin to move then the MMs would have to buy or sell large amounts and thereby be long or short on a stock (profitably or not) rather then simply have the option positions. The above scenario does make it difficult for MMs to make money with the stock trades to keep their option positions profitable. This is assuming that betting on the 80%-95% number means that solely writing options is the most profitable case. The problem that I have is that betting one way requires immense manipulating power to win, whereas writing both sides seems a better bet statistically.