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Sorry about that! I know the guy who probably did your orders - Eddie
Sperano-(A good guy I might add) At the end of the day if the market is ,
let's say, 80 bid at 90 with a customer order offering at 83, then the
market would settle at 82 as opposed to 85. Sometimes the committee doesn't
know an order is there, and ten min after the settlement a broker will come
running up that he had an order so don't settle through him - sometimes he
can be accommodated, sometimes not. Sometimes there is a big combo order
that traded hundreds of time during the day with the customer still unfilled,
so in the settlements one side of the order will settle out of wack. (Ex. the
80-90 strangle is trading 15 tics under fair value, instead of both sides
settling 7 points under, one side will settle near fair value while the other
side will settle way out of line at 15 tics under.) Using limit orders -
depends what type of limit. If you say I want to buy a particular call but
don't pay more than ,let's say, 150 tics......well if the market has a good
downmove maybe you don't want it at all. Much better to say pay up to 150 as
long as the market is above X price. The locals hate that because under X
price is where they really get edge, also they can't really lean on your
order too well.
All in all the settlements have gotten better in recent times. It used to be
that customers ( and locals) could mark the close with a lousey 1 lot
trade...but no more.
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