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FAIRBANKS3 wrote:
>
> Hi...This info pertains to the Philly and the Amex..I don't know about the
> CBOE.... The bid -ask is changed by the specialist in most cases with the
> spread difference automatically put in by computer. This market can then be
> tightened by a customer order or market makers who want to post a market.
> Legging into a spread can be profitable if the market wiggles a bit so both
> your sides get done at good prices. More often then not, you just end up
> paying up. At least ask for the market in your spread as a spread....as the
> risk is less for the market makers ( and specialist) the price will be better
> than the two outrights and may approach where you wanted to leg in anyway.
> Good luck.
Thanks for the info.
Thanks DOCTOR for the lengthy discussion. I guess I'm still digesting
it.
How do you determine where the market is in a spread? If I ask my broker
he'll just quote the natural spread (ask on buy minus bid on sell) but I
know you can get a better price than this , but what price ?. I actually
do want to take advantage of the short "wiggles" of the market to get a
better price for the spread since it will increase profit potential and
will reduce my risk once you are in. I started traking the bid-ask
spreads and real trades real time to determine the market but I don't
know how to interpret the numbers . Maybe I can post the results so
someone can interpret them.
Marcelo
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