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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: Herm who wrote (10148)	3/29/1999 9:42:00 PM
From: Dan Duchardt	Read Replies (3) \| Respond to of 14162

After reading Herm's reply I am left with some questions by Vincent's example. For stocks, traders usually see where the interest behind the bid/ask resides. For example, the NASDAQ Level II screen shows all the bids and asks from all the market makers quoting prices near the inside market, and most stock daytraders consider this information to be crucial in choosing the mechanism to get their orders executed. In addition, automatic execution systems have been put in place to prevent (or at least make it more difficult) the MMs from playing the quick shuffle game Herm describes for market orders. In Vincent's example, it sounds like there was a single market maker establishing the inside market, and that he chose to lower both his bid and ask in response to Vincent's limit order. My question then is, "What is the status of Vincent's offer compared to the offer of the MM?" If some buyer is willing to pay Vincent's asking price, does he have any chance of getting filled, or is the MM going to have priority for these orders? Where does an option limit order go if I choose to place one, and how does it get represented to the public? Is there a best place to find a description of how the option exchanges operate, and the roles of the MMs, order execution, etc, etc?