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Hi RTrs,
I ran into the following problems while trying to help a friend trade stock
options under fast market conditions:
1. Internet based PC Quote was too slow sometimes the option price was 2
or 3 point off the broker price. AOL was the internet provider
2. On the other computer we had charts of stock price from rttrader
internet based also, the difference in the stock price between the two
service was 2/3 points at times -one service would be faster at certain
times slower at other time. The internet provider was AccessPro.
3. My friend had an account with Waterhouse Securities. Using market orders
to get in and out cost a point or two off the option price for example if
the price on the option was 11 if we were getting in we would pay 12 or
more, if we were getting out we would get 10 or less. Since then we have
started asking the bid and ask and put a limit order at the ask sometimes
we would have to cancel and replace order a few times because the price
moved away.
4. Web-based trading was useless - we had to use the telephone.
5. Internet service was over ordinary telephone line.
6. Our computers with win95 did freeze a few times as it normally does.
7. Our trading style was short-term (2 or 3 days} at times day-trading.
8. We didn't use Black-Scholes or worried about volatility-just use call
and put for directional trading in lieu of stock.
9. I am a newbie as far as stock option trading is concerned. I have traded
futures for a while. I liked stock option trading inspite of the problems
Considering the following options for trading:
a. Switching over to Windows NT from win95.
b. Switching over to DTN satellite based quotes.
c. Switching over to Dreyfus or Investrade for lower commisions.
d. For Web-based trading, using newer technology like cable modems etc.
e. Considering other trading execution system used by professional
traders- Instinet is only for companies. Also getting access to
after-hours trading if possible.
Looking for suggestions from other traders.
Soory for the long post.
Thanking you ,
Asif
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