We report here optical observations during the September/October 1998 outburst of the black hole candidate XTE J1550-564 .
CCD photometry was obtained for the optical counterpart with the 0.9m Dutch telescope at La Silla since the onset of this event .
We analysed 211 U , V and i frames , from Sep 10 to Oct 23 .
Stochastic flaring activity was observed on Sep 11-16 , but no evidence for a superhump period , as seen in other soft X-ray transients , was found .
An optical flare nearly simultaneous to an X-ray flare that occurred on Sep 21 was observed in the V-band .
A reddened optical spectrum showed the typical emission lines corresponding to X-ray transients in outburst .
From the interstellar absorption lines , we derive E ( B-V ) = 0.70 \pm 0.10 and suggest D \approx 2.5 kpc .
In such case , M _ { B } \approx +7 mag .
for the progenitor , which is consistent with the spectral type of a low-mass \sim K0–K5 main-sequence companion .