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Technology Stocks : Seagate Technology - Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Frodo Baxter who wrote (575)3/2/1999 2:10:00 PM
From: Robert Douglas  Read Replies (1) | Respond to of 1989
 
Lawrence,

Don't forget wide spreads. It's about like trading in and out of your house every month paying a 6% real estate commission.[6% would be a steal on options as Lawrence points out] I have owned stocks since I was 10, but have never owned or written an option. Every time I think of buying one I blanch at the large premium and every time I consider writing one I think the premium unsatisfactory to compensate for the risk. I make a policy to avoid them.

-Robert



To: Frodo Baxter who wrote (575)3/2/1999 3:50:00 PM
From: manohar kanuri  Read Replies (1) | Respond to of 1989
 
7/8ths on a dollar bid is a bit wide - could be:

1. Errors in bid/ask price reporting. Notorious in options.
2. Volatility. In the case of SEG I'm guessing it's not much higher than 30. Probably 26-28 more like.

Unless volatilities are very high you'll usually get a fill an eighth to a quarter above the bid.

mano


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