Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : CMGI What is the latest news on this stock? -- Ignore unavailable to you. Want to Upgrade?

To: B. A. Marlow who wrote (5978)	3/14/1999 12:59:00 AM
From: SJS	Read Replies (1) \| Respond to of 19700

These option MM guys are one tough lot. The spreads are way too high. 1/4 to 3/8, and 1/2 for deeper money options is WAY TOO MUCH. I've seen 2 point spreads on CMGI, but that's due to it's volatility. As for spreads, I usually don't roll them, and ALWAYS break them up (because I mostly leg into them, or out). Mostly, because the transaction costs are so low, I also usually exercise (or get assigned) and then sell the stock for $15, instead of paying the 1/4 or 3/8 option and then commisions on top. Save tons of money. Fidelity has a neet option plan that allows you to sell ANY AMOUNT of options 5/8 or under TO CLOSE for $15. Any amount to close for $15. Now if we can play hardball with the MM, and give them their 1/16 or at most 1/8, I'll play it that way. But...that rarely works. One last thought: Use the DELTA option stat to figure the movement in the stock and the corresponding movement in the option. You can occasionally catch the MM "asleep" at the switch and hit the bid if they forget to move it. If you're trading options, always have the calc working to understand the theoreticals while you trade. Also, finding good volatility number (historicals) is very important for this. Regards,