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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: VincentTH who wrote (10146)	3/29/1999 8:54:00 PM
From: Herm	Read Replies (1) \| Respond to of 14162

Alot has to do with how many blocks of shares are on the table on the bid side and ask side. With no volume, I have noticed my bid limit buys are greeted by a drop in the bid/ask. Yes, those MMs are forcing you to drop you price in order for them to turnaround and have an out with a 1/8 profit. If you placed a market order they would do the same faster than you can say covered calls. In a blink of an eye those guys and gals will drop the price, take your money, raise the price and sell for an instant 1/16s to 1/8s+ profit. For sure, with some stocks it's easier to trade the stock in and out!

To: VincentTH who wrote (10146)	3/29/1999 9:45:00 PM
From: David Wright	Respond to of 14162

Vince, I almost always try to "split the difference" in the spread, buying or selling both stocks and options. It seems like most of the time with stocks (especially the exchange stocks with specialists), they will do a quick shift to hit your price, and then go right back to the previous spread & prices. You can only see this with a real time streaming, or tick-by-tick service. Both the specialists and the MMs do have the responsibility to "make a market". They can't do it if they don't move stocks around. Also, the basic WINs philosophy is to buy right on the stock, and wait for the option price to move up to meet your goal. I often like to day trade into my stock, once I like it's position, and then just drop a GTC limit order to write the CC. If I was right on the stock, then eventually I'm right on the option. Saves a lot heartburn as you try to get your brokers screens to change fast enough to keep up with a moving target. I agree with Herm...never, never do a market trade. I might also add, don't ever lay a trade on before 10 EST. All that unpredictable volatility you see at the open (gaps) are orders being filled for folks that blindly entered them the night before. Look hard at the 5 and 15 minute charts before you trade. If you like TA indicators for day charts, you should also like them for your actual trading. Hey, I know day trading is a no-no, but you can save an 1/8th here, and 1/4 there on every trade if you use the trading techniques to open and close positions. Read Bernstein's "the Compleat Day Trader."