How do institutions buy/sell large amounts of options?

newwurldmn said:
He founded lime. He also founded a file sharing service (like napster). He also founded tower research (a quant prop firm)
More...
He is also a veritable nutcase, a colander shy of a crazy person. To be honest, it's incredible how crazy and brilliant he is at the same time.

On the topic - institutional investors would, in most cases, call up a dealer desk. Usually anything large would get quoted with a tie (i.e. with a delta exchange) and printed on the exchange a some point after the trader. These days a lot of people want to execute their own delta so they cross the stock too - it also frequently allows them to mask the level at which the trade was done.
 
Last edited by a moderator:
I assume these orders can go unfilled or not fully filled all the time? Just because I want to sell 100K calls on Tesla that doesn't mean there is a buyer for it not even at a bad price.
 
Pekelo said:
I assume these orders can go unfilled or not fully filled all the time? Just because I want to sell 100K calls on Tesla that doesn't mean there is a buyer for it not even at a bad price.
More...
I very never had that happen. On many occasions, I've written far more than the oi in a given series, both equity options and future s options, by selling at a sligjlty lower vol and vice versa. I've found I can pretty much operate on the notion that there is unlimited size in any option provided it's not trading down in a few Pips if I'm willing to give something up and it's usually not a lot that I have to give up to do it.

As for Robert Morris, in addition to appreciating his posts, as I have accounts at Lightspeed as well, I find them to be a top-notch firm. Especially when the shtf, when big-name other Prime Brokers have fallen dow on me in the middle of the night, stood away, Lightspeed stood up, helped me through some tough trading moments - they have some very top notch people there. I wish hey had a more sizable custodian on their end that's my only concern and it's not a concern of mine but rather of the clients. But like I said, I want to deal with people who I know will handle things in the foxhole, people who will be there, like on the morning of October 20th, 1987 or February 6th, 2018, and these are the kind of people I want to be in the foxhole with, the kind of people I have found at Lightspeed.
 
rvince99 said:
..... I want to deal with people who I know will handle things in the foxhole, people who will be there, like on the morning of October 20th, 1987 or February 6th, 2018, and these are the kind of people I want to be in the foxhole with, the kind of people I have found at Lightspeed....
More...


How does Lightspeed handle those sort of situations better than other brokers such as IB?
 
rvince99 said:
I very never had that happen. On many occasions, I've written far more than the oi in a given series, both equity options and future s options, by selling at a sligjlty lower vol and vice versa. I've found I can pretty much operate on the notion that there is unlimited size in any option provided it's not trading down in a few Pips if I'm willing to give something up and it's usually not a lot that I have to give up to do it.

As for Robert Morris, in addition to appreciating his posts, as I have accounts at Lightspeed as well, I find them to be a top-notch firm. Especially when the shtf, when big-name other Prime Brokers have fallen dow on me in the middle of the night, stood away, Lightspeed stood up, helped me through some tough trading moments - they have some very top notch people there. I wish hey had a more sizable custodian on their end that's my only concern and it's not a concern of mine but rather of the clients. But like I said, I want to deal with people who I know will handle things in the foxhole, people who will be there, like on the morning of October 20th, 1987 or February 6th, 2018, and these are the kind of people I want to be in the foxhole with, the kind of people I have found at Lightspeed.
More...

Except “Morris”, thank you.
 
OptionsOptionsOptions said:
How does Lightspeed handle those sort of situations better than other brokers such as IB?
More...
Oh that's not a function of the executing broker, but rather that when the SHTF I watched prime brokers that you thought would be able to handle the heat and couldn't, when in fact, Lightspeed did. Amazing how those 5-sigma days separate wheat from chaff.
 
Robert Morse said:
An institution would likely use their broker's trading desk or a third party trading desk like BTIG. Those desks have access to a small list of large MM, a larger list of smaller MM and a group of hedge funds that focus on providing liquidity. They communicate over the phone and through a messenger service like Pivot, to "shop" the order. As a small market maker, up to 2010, I used AIM to respond to institutional option orders. I was required to respond with a 2 sided market for any request with a size of at least 100 up or I would be ignored. Most orders that came across were between 1000 and 10,000 and many paired with stock.

With regard to size, size is relative. Smaller players will respond to any order. Larger players only care about larger orders because they need that size to care. Any VERY large order will disrupt any market but those are rare. By VERY large I mean one that would take many days to hedge or would require a regulatory filing.

Bob
More...

So those dealers or MM's are not available to take the other side of an order from a retail trader because they are more exclusive and not on an exchange I guess? Cuz when I send an option order for a 100 in IB, I see it gets split into ten thousand partial fills with some of the fills for like 5 contracts from the exchanges. And it takes forever for it to get filled. If the smallest contract size those MM's can fill is 100, my option order should've been filled with ONE fill.

So how do I get access to those MM's?
 
You must log in or register to reply here.
Back
Top