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<DIV><FONT color=#000000 size=2>Have never tried to trade utilizing Elliot
Waves. However, am left with</FONT></DIV>
<DIV><FONT color=#000000 size=2>impression is that they are not very useful.
Last year read "At the Crest</FONT></DIV>
<DIV><FONT color=#000000 size=2>of the Tidal Wave" by Robert Prechter. His
market prediction certainly</FONT></DIV>
<DIV><FONT color=#000000 size=2>has amounted to a miss by a mile. Anyone
actually use these to</FONT></DIV>
<DIV><FONT color=#000000 size=2>trade ? Is this methodology better used to
predict longer term</FONT></DIV>
<DIV><FONT color=#000000 size=2>trends ?</FONT></DIV></BODY></HTML>
</x-html>From ???@??? Thu Jul 16 16:36:19 1998
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From: "Stan Rubenstein" <stansan@xxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Subject: Re: STOCK OPTION TRADING-PROBLEMS
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ALTAF, YOUR TALE OF WOE IS DUE TO YOUR BEING
IN A HURRY TO MAKE MONEY.
I'VE TRADED OPTIONS ON LINE FOR TWO YEARS
SO MY ADVICE IS OFFERED BELOW.
STAN R.
----------
> From: ALTAF JUMMA <ASHLEYJUM@xxxxxxxxxxxxxxxx>
> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> Subject: STOCK OPTION TRADING-PROBLEMS
> Date: Thursday, July 16, 1998 8:53 AM
>
> 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. THIS IS A CLASSIC
STORY. YOU PAID 10% MORE THAN NECESSARY AND SOLD FOR 10%
LESS THAN NECESSARY. YOU WOULDN'T DO THIS IF YOU BOUGHT
STOCKS WOULD YOU?
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.
DON'T BOTHER. THIS IS NOT YOUR PROBLEM. MY WIN95 SYS
CRASHED OFTEN ENOUGH BUT IT NEVER INTERFERED WITH MY PLANNED OPTIONS TRADE.
PLANNING IS THE KEY.
> b. Switching over to DTN satellite based quotes.
ALSO YOU'RE BARKING UP THE WRONG TREE.
I USE AN ON-LINE BROKERAGE WHICH PROVIDES REAL TIME
OPTION QUOTES, BOTH BID AND ASK. MOST BROKERS, ON-LINE
OR OFF-LINE WILL GIVE YOU THIS AS PART OF THE SERVICE.
> c. Switching over to Dreyfus or Investrade for lower commisions.
YES SWITCH TO A BROKERAGE THAT'L PROVIDE RT QUOTES.
DON'T WORRY ABOUT COMMISSIONS, YOU'RE BEING BURNED
BY THE WIDE SPREAD. NEVER GIVE MARKET ORDERS.
IF YOU'RE IN SUCH A HURRY TO PAY MARKET PRICES YOU'LL
LOSE MONEY ON YOUR TRADES JUST AS FAST.
> d. For Web-based trading, using newer technology like cable modems etc.
FORGET THIS. YOU SHOULD BE SPENDING YOUR TIME LEARNING
OPTIONS PRICING AND TRADING.
> e. Considering other trading execution system used by professional
> traders- Instinet is only for companies. Also getting access to
> after-hours trading if possible.
FORGET THIS. NO ONE IS GOING TO ACCOMODATE YOU UNLESS
YOUR TRADING BIG BUCKS! ALSO AFTER-HOURS TRADES WILL
RUN INTO LIQUIDITY PROBLEMS. NOT A PROBLEM FOR MILLIOIN
DOLLAR TRADERS WHO DOMINATE AFTER HOURS.>
> Looking for suggestions from other traders.
YOUR POINTS #2, #7 AND #8 BETRAY INEXPERIENCE.
DON'T FOCUS ON THE TECHNOLOGY OF CONNECTION, INSTEAD
FOCUS ON UNDERSTANDING THE PRICING OF OPTIONS AND THE
AFFECT OF VOLATILITY.
IF YOU CONNECT WITH A REGULAR, BUT EXPERIENCED OPTIONS
BROKER (MOST ARE IN CHICAGO) AND SOME ARE AT THE MAJOR
STOCK BROKERS. FIND ONE WHO CAN EXPLAIN HIS BACKGROUND
AND WILL TEACH YOU WHY HE RECOMMENDS THE TRADES HE
DOES.
IT WOULD BE BETTER IF YOU TOOK A SHORT COURSE IN OPTIONS.
CERTAINLY GET THE VIDEO TAPES FROM OCC, AND PAPER-TRADE
BEFORE YOU SPEND MONEY.>
> Soory for the long post.
>
> Thanking you ,
> Asif
GOOD LUCK.
STAN
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