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Technology Stocks : IFMX - Investment Discussion -- Ignore unavailable to you. Want to Upgrade?

To: Anita J. who wrote (12882)	1/26/1999 10:34:00 PM
From: Victor Lazlo	Respond to of 14631

Many fast-growing tech stocks will rise up to the earnings annoucement, then sell off in the days following even if the results are higher than the whisper #. This is a repeating pattern that can be verified. But the flipside of the coin is that these good stocks always rebound soon after ... Victor

To: Anita J. who wrote (12882)	1/26/1999 10:43:00 PM
From: michael katz	Read Replies (1) \| Respond to of 14631

a limit order at the bid, whether a stock or option, would assume that the price will either go down or the market maker will sell at a zero spread. More likely but still not guaranteed would be to place an order between bid and ask. If you were unable to buy at the ask there would be something screwy unless the price moved up before your order went in or you were looking for more shares/contracts than offered at that price.

To: Anita J. who wrote (12882)	1/27/1999 3:17:00 AM
From: Marq Spencer	Read Replies (1) \| Respond to of 14631

Anita, The "bid" price is the highest price that some buyer is willing to pay. The "ask" price is the lowest price the seller is willing to sell for. If ask and bid were the same, the entity (stock, option, whatever) would be sold. So, if the ask is $1, and bid is $3/4, then there wouldn't be a sale unless one of the following happens - a seller comes in who's willing to sell for $3/4, or a buyer comes in who's willing to buy for $1. If you place a limit price at the bid ($3/4 in the above example) your order will wait until a seller shows up who's willing to drop the price to $3/4. Hope this helps. >Since I'm new to this options game, I really don't understand the mechanics behind it either.< I'd recommend reading about this stuff before you try to trade options. Otherwise, you'll end up learning at your expense. - Brian.

To: Anita J. who wrote (12882)	1/27/1999 7:17:00 AM
From: Mike Harvey	Read Replies (2) \| Respond to of 14631

Anita, stay out of options. You have no business being in them, given the level of knowledge you demonstrated in your post. I say this as a statement of fact, not as an insult. They are certainly tempting, from a leverage point of view. There is nothing more exhilarating than to score bigtime on a relatively modest investment; it's better than sex. I once made $14,000 in about 20 minutes, for example. But you have to be consistently right, on both direction and timing of the underlying stock, for you to make money in the long run. I wasn't, and you won't be either. Plus, with options, you have to overcome bid/ask spreads which, if you do the math, you will find are ridiculous on a percentage basis. Go look at any options quote list for any stock and see. For example, if an option is quoted as 3/4 Bid, $1 ask --- that's a 25% spread you're paying. Said another way, your investment experiences an INSTANTANEOUS drop of 25% the minute you execute the transaction. Add your broker's transaction fee, which on a $1000 investment is probably going to be another 3 1/2 or 4%, and you're now talking a 30% instantaneous drop. Later, you've got to overcome a similar cut when you sell; therefore, all in, we're talking 60% hurdle to making your first dime. You get a more favorable playing field, and you'll lose less money, by going to a racetrack and betting your odometer. Stick with picking good companies, and buying their shares, and wait for the stock price to catch up with their underlying value.