From: gary@intrepid.com (Gary Funck)
Subject: Re: Trading program.
Organization: Intrepid Technology, Inc.
Distribution: na
Date: Thu, 10 Sep 1992 18:06:30 GMT

In article <1992Sep5.003308.7146@cs.umb.edu> sasha@ra.cs.umb.edu (Alexander Chislenko) writes:
>
>   It looks like I finally found a trading algorithm that can bring me $
>without any investment or risk.  At least I think so.
>Now I need to find a broker who takes no more than 2% commission on options,
>and get access to a trading program which I could enhance with my applica-
>tion (or at least a good real-time quote line).
>Do those things exist?
>   Or can I approach some brokerage firm with my idea and hope I get what
>it's worth?
>
>   I would appreciate any advice (or cooperate with anybody who has the
>above mentioned resources.
>
>	Alex.


I've written a couple of programs, that are at the "work in progress"
stage, that'll call Dow Jones, and grab all the options quotes for
a given symbol.  Another program computes implied volatility and
delta.  Right now, the retrieval program is primitive, but it does
step around the drudgery of coming up with those funky options
symbols, and it deals with the ASCII format of Dow Jones.  I use
the DJNR flat fee ($25) after-hours service.  Compu$erve  has a
flat fee which is a lot lower ($8/month), and can retrieve 15-min
delayed quotes during the day.  I'll probably switch to Compuserve,
once I learned more about their service.

OPEN OFFER: In a month or two, I'd like to get these programs to
a reasonable state and with enough documentation to meke them
usable.  But some of the programming is complicated, and these
programs need testing and more work to make them generally useful.

What I'd like to do is work with a small group of other netters,
who have (1) an interest in options, and/or stock quote retrieval,
(2) access to a quote service, (3) some C programming experience,
(4) some "spare time", and (5) a good sense of humor, and willingness
to help improve someone else's hacked code.  Oh yeah, right now
the otion/stock programs run on Unix only.  It would be nice to
have a PC/Mac port, and access to some other services besides Dow
Jones, before placing the programs into the public domain.

So, if you're interested, just drop me a line. If you don't
want to be part of the "group thang", and just want the sources
that's okay too, but you're likely to get as much support as
you're paying for :-).  All that I'd ask is that you'd send
back any improvements, and be willing to have them posted to the
net.  Obviously, if you program in your own proprietary
trading algorithms, my request wouldn't apply.

The OptionVue program is considered the premier optins program,
and at $800 you have to be pretty serious about the whole thing.
There seem to be two real-time quote services of choice: Signal
and Bonneville.  They'll tie in to Optionvue.  Siganl has market
share, but Bonneville is apparently offering more data at the same
price by using 9600 baud modems (I believe Bonneville includes
tic-volume and block trade info as well as real-time quotes).
These services are pricey (something lie $300/month?).  They
both advertise in Investor's Daily.

In the more modest category, for around $10 dollars, you can buy
a truly useful options program from Michael Main at Univ. Colo.
The progam is PL\Graph.  It prints "profit/loss" graphs, computes
deltas. etc.  Data entry is flexible and friendly.  The program
runs on an IBM PC/clone; and is a screaming deal.  Contact
Michael at main@piper.cs.colorado.edu for details.

So, for about $5K investment you can get pretty close to top-of-the-line
in amateur options trading services.  You'll also want to find
a very accessible broker.  I use Pacific Brokerage, cause theu're
pretty cheap (see below). When things get busy, though, they aren't
the friendliest/most responsive folks to deal with.  Other individuals
I've corresponded with also like Brown & Co. and Aufhauser (sp?).
If you're new to options there's something to be said for working
a full-service broker specializing in options.

Here's the Pacfic Brokerage fee schedule:

Price of Option	  Number of Contracts
		  1-10	   11-49    50 & above
		  ----------------------------
1/16 - 7/16	  2.50	   2.00	    1.59
1/2 - 1 15/16     3.50     2.50     1.75
2 - 3 7/8         3.75     3.00     2.50
4 - 7 7/8         4.75     4.00     3.00
8 - above         6.25     5.25     5.00

with a minimum overriding charge of $25+$3 handling: $28

Here's an example:

You buy 10 contracts at $1.50, total value => $1500:

	commission: 10 @ $3.50 => $35 + $3 => $38 or 2.5%.

This is just the buy side of the transaction.  If the options
advance to $2.50 and you sell to close your position:

	commission: 10 @ $3.75 => $37.50 + $3 => $40.50.

total comissions: $78.50 / $1500 => 5.2% round trip

Pacific Brokerage may not be the cheapest for options, but they're
lower than most.

Happy trading,

- Gary
-- 
| Gary Funck  		    gary@intrepid.com  [uunet!uupsi!intrepid!gary]
| Intrepid Technology Inc., Mountain View CA (415) 964-8135
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