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<DIV><FONT color=#000000 size=2>Bryant:</FONT></DIV>
<DIV><FONT color=#000000 size=2></FONT> </DIV>
<DIV><FONT size=2>From what I can determine they like to fade the market
when</FONT></DIV>
<DIV><FONT size=2>buy and sell programs kick in. That is to say, they like
to buy</FONT></DIV>
<DIV><FONT size=2>in the face of a sell program and vice versa. Their
numbers for</FONT></DIV>
<DIV><FONT size=2>where the programs kick in are a lot different than those
we</FONT></DIV>
<DIV><FONT size=2>see on the other services. There is a big difference in
the</FONT></DIV>
<DIV><FONT size=2>spread--in other words their buy and sell numbers are a
lot</FONT></DIV>
<DIV><FONT size=2>higher and lower than the conventional numbers
seen.</FONT></DIV>
<DIV><FONT size=2></FONT> </DIV>
<DIV><FONT size=2>Chas</FONT></DIV>
<DIV><FONT size=2></FONT> </DIV>
<BLOCKQUOTE
style="BORDER-LEFT: #000000 solid 2px; MARGIN-LEFT: 5px; PADDING-LEFT: 5px">
<DIV><FONT face=Arial size=2><B>-----Original Message-----</B><BR><B>From:
</B>Bryant Tharp <<A
href="mailto:bulldog5@xxxxxxxxxxxxxx";>bulldog5@xxxxxxxxxxxxxx</A>><BR><B>To:
</B>charles meyer <<A
href="mailto:chmeyer@xxxxxxxx";>chmeyer@xxxxxxxx</A>>; <A
href="mailto:realtraders@xxxxxxxxxxxx";>realtraders@xxxxxxxxxxxx</A> <<A
href="mailto:realtraders@xxxxxxxxxxxx";>realtraders@xxxxxxxxxxxx</A>><BR><B>Date:
</B>Monday, June 21, 1999 5:10 PM<BR><B>Subject: </B>Re: <A
href="http://www.programtrading.com";>www.programtrading.com</A><BR><BR></DIV></FONT>What
I was looking for is this I have run into methods and ideas that I would not
use but have helped me trade my methods ie channel breaks or high / low
breaks ,,,for me to much slippage and I hate leaving that much of the move
on the table ,so I sell or buy to the breakout players at the very least I
take some profit there and maybe leave one for show ,,,but knowing this
helps me understand the big picture ,, <BR>I got the impression that you
would learn the ins and outs of program trading . Knowing that I thought
might help with any method .
<P>charles meyer wrote:
<BLOCKQUOTE TYPE = CITE> <FONT color=#000000><FONT size=-1>Feedback
I got was that this stuff is really hard to trade....</FONT></FONT><FONT
size=-1>This was from someone who took the service.</FONT> <FONT
size=-1>Chas</FONT>
<BLOCKQUOTE
style="BORDER-LEFT: #000000 solid 2px; MARGIN-LEFT: 5px; PADDING-LEFT: 5px"><B><FONT
face=Arial><FONT size=-1>-----Original
Message-----</FONT></FONT></B> <BR><FONT face=Arial><FONT
size=-1><B>From: </B>Bryant Tharp <<A
href="mailto:bulldog5@xxxxxxxxxxxxxx";>bulldog5@xxxxxxxxxxxxxx</A>></FONT></FONT>
<BR><FONT face=Arial><FONT size=-1><B>To: </B><A
href="mailto:realtraders@xxxxxxxxxxxx";>realtraders@xxxxxxxxxxxx</A>
<<A
href="mailto:realtraders@xxxxxxxxxxxx";>realtraders@xxxxxxxxxxxx</A>></FONT></FONT>
<BR><FONT face=Arial><FONT size=-1><B>Date: </B>Monday, June 21,
1999 2:26 PM</FONT></FONT> <BR><FONT face=Arial><FONT
size=-1><B>Subject: </B><A
href="http://www.programtrading.com";>www.programtrading.com</A></FONT></FONT>
<BR> <FONT size=+1>Has anyone taken or attended any of this
outfits seminars ,,,If so , would it be useful or not for
someone intraday trading ?</FONT> <BR><FONT
size=+1>www.programtrading.com/hlc.htm?</FONT></BLOCKQUOTE></BLOCKQUOTE></BLOCKQUOTE></BODY></HTML>
</x-html>From ???@??? Mon Jun 21 20:26:08 1999
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Date: Mon, 21 Jun 1999 21:14:20 -0400
From: cb <cpbow@xxxxxxxxxxxxx>
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To: Mervin Yeung <tinyeung@xxxxxxxx>
CC: Real Traders <realtraders@xxxxxxxxxxxx>
Subject: Re: OPTN: Market on Close
References: <376E9C46.673951E5@xxxxxxxx>
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Mervin Yeung wrote:
>
> Hi RTs,
>
> I am trying to use options to replace stops. I worry about the
> liquidity. I know the close is usually the most liquid of the day. I
> wonder if I use Market on Close Order to buy calls or puts right at the
> close, is it a good way?
>
> Thanks in advance!
>
> Mervin
A lot of futures options only trades a few (as in say 5) times per day.
I would assume not necessarily at the close. (As I understand it,
placing a market order essentially forces your floor broker to offer
higher and higher; if nobody at all really wants to sell that option at
that particular time, you might get a very unpleasant result.)
I would place a limit order based on the previous days settlement. One
idea would be to place a limit order a couple tics above the settlement
to be more sure of getting a fill. A refinement would be plug in the
settlement price and futures price into a spreadsheet, and then at the
open the next day, plug in that price for the futures price and use the
new option price as the limit. If you don't have a sprdsheet you could
accomplish essentially the same thing by looking up the delta of the
option on the net (for example at, http://216.71.81.240/inewf.htm ), and
using (futuresopen-close) x delta to get the adjustment for your price.
I have a tiny acct. and have traded some fairly illiquid options. I use
the settlement price on commodities that dont trade overnight, and i use
the overnight session close on currencies, metals (and interest
rates?).
I do forsee a problem using options as stops. Presumably, once you are
in the futures, you want the option, and would not be happy if you don't
get a fill; yet this may happen. Maybe the risk of being unprotected,
would make a market order warrented, but you could incur some
significant slippage, particularly relative to the price of the option
(a 20 pt. slippage is probably going to *seem* a lot worse on a 100 pt
option than it would in the futures).
A futures with a put instead of a stop is a lot like a call. Why not
just buy a call?
Conrad Bowers
a relatively new trader who has traded perhaps 30-40 or so options in
the last 3 yrs., most of them fairly illiquid.
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