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Re: OPTN: How can they do that?



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Thanks for the straight answer Alex.  Tell me, who takes responsibility for
the cboe side of a specific RAES trade?  A specific market maker? A
collective system?  Tell us more about the Autoquote system.  It should be
interesting.

BobR


----- Original Message -----
From: THE DOCTOR <droex@xxxxxxxxxxxx>
To: ROBERT ROESKE <bobrabcd@xxxxxxxxxxxxx>
Cc: Dick Crotinger <dangle@xxxxxxx>; kohath <kohath@xxxxxxxxxxxxx>;
<realtraders@xxxxxxxxxxxx>
Sent: Thursday, August 12, 1999 3:32 PM
Subject: Re: OPTN: How can they do that?


> Robret,
>
> You may chose to believe whatever you want...but you were lied to.  RAES
is
> driven by the autoquote system...that is correct.  The crowd can change
the
> bid/ask, but there is no feature built into the RAEs system to
automatically
> change the b/a after a trade has hit.  Insider or not the answer you got
was
> pure bullshit.  You should be aware, however that the fact that you used
RAE's
> for multiple orders most likely means your order, if originating from a
specific
> brokerage wirecode, were declared RAE's ineligible.  Breaking order ups to
> qualify for RAE's is a violation of the rule at CBOE, but be that as it
may,
> there is no ability to skew RAE's to adjust.  What the crowd would do if
they
> were getting banged a lot is take that series off of RAE's and simply
trade it
> manually.  They can do that and you would be able to detect that your
series was
> no longer on RAEs as the quote would no longer have an A in the quote
field.  If
> you would like to see the system in action, let me know and I will
personally
> take you on the trade floor so as to demystify the bullshit you were told.
>
> ROBERT ROESKE wrote:
>
> > There may be more to it than meets the eye.  The reason is RAES software
is
> > programmed to emulate a market maker under certain conditions.  For
example,
> > where do you believe that OEX RAES bid ask quotes come from?  Do you
think
> > they come from someone keying them in or do they come from a software
> > routine that calculates and anticipates the next trade?  Sounds devious
> > doesn't it.  Well some years back I was hammering RAES with some trades
in
> > sequence during a lightly traded Friday and each time I placed an order
to
> > sell to close, the Bid would drop a tick.  The next time I had a pot
load of
> > options to unload I discovered that if I delayed the next trade by a few
> > minutes, the bid would "float" back up.  It was rather suspicious so I
> > inquired about this from someone who should know since he is a cboe
insider
> > and his answer was, yes, the RAES software will automatically change the
bid
> > ask in its favor if it gets hit with a flurry of trades.  After all,
that is
> > what a live market maker does, doesn't he.  So, Dick, it sounds like you
got
> > the shaft by a software routine.  That my friend, is electronic trading.
> >
> > BobR
> >
> > ----- Original Message -----
> > From: Dick Crotinger <dangle@xxxxxxx>
> > To: kohath <kohath@xxxxxxxxxxxxx>; <realtraders@xxxxxxxxxxxx>
> > Sent: Thursday, August 12, 1999 2:35 PM
> > Subject: Re: OPTN: How can they do that?
> >
> > > The Market WAS at 9/16 when your order was filled.  That is the end of
it.
> > > >Kohath
> > > >
> > > I agree... but the market moved there because I placed my order.
> > >
> > > That is the problem I have with it.
> > >
> > > That is the end of it.
> > >
> > > Dick Crotinger
> > >
> > >
> > >
> > >
> > >
>
>
>