Subject: File No. S7-07-04
From: Brad Corbin

January 26, 2005

In addition to my previous email where I commented on minimum increments I would also like to comment on Maximum increments.

For very thinly traded options, spreads (difference between the Bid and Ask) can go as high as $.80

Pricing at such large spreads becomes so inefficient that trading these options is not feasible.

Many times I have seen instances where the bid of the option is way below even it's intrinsic value.

Due to the fees imposed on investors to change or cancel an option order it is not feasible for an investor to manually participate in the market and reduce this large spread. Investors need an order facility where an option order can be placed that is automatically adjusted as the underlying stock moves.

Only such an automatic order would give the investing public any chance at all to participate in the market for thinly traded options and have a chance at getting a fair price for such options. These cancellation fees are fundamentally unfair to investors and prohibit active trading in options. This must be addressed if there is any desire to have more active participation by the investing public in the option markets.

Brad Corbin