How many options ?

P

Profitman

Have traded stocks and/with options for a few years now, with, imo, decent profits, and maybe I'm ready for the next level.
So I got a question, I can't seem to find an answer for the amount of options one can trade on any given stock ?
Say I want to sell, or buy 20.000 put options ?
Is the marketmaker obliged to fill that kind of order for me ?
Or what if, say, 10.000 traders want to do the same with just 2 options ?
The amount will be the same ?

Would appriciate any answers.

Regards, Profitman
 
The only limit is the cash in your account...

- You can buy as many options as your cash balance will allow.
- You can sell as many options as your margin requirements will allow.
 
So even if OI is about say 200 contracts, I can sell or buy another 5000 contracts ?
Ofcourse if my account is big enough.
So what I stated, MM is obliged to fill my order ?
 
As long as the market maker and/or the public are willing to take the other side, I'm not aware of any caps that limit the creation of new contracts. The risk, of course, is if you're in a thinly traded name or a thinly traded strike - you might get a small fraction of your desired quantity in the range of the current bid-ask.
 
Thx for your answers, very helpfull, and ajacobson, thx for the link.

It's all about large cap stocks like T, WMT, PG, those kind of stocks.
I understand that it's, in normal cases, impossible to open up 10.000 postitions in a thinly traded stock, or indeed with a price that is totally skewed with reality.
Just wondered, if I buy 1000 pieces of say, WMT, and I want to buy 10 married puts with it, that won't be a problem.
But when 1000 people at the same time, for some reason, will do the same, 1000 x 10 will be 10.000 put contracts, and then I started to wonder......
OI isn't that high, even in stocks like WMT.

How do the big guys protect their positions ?
Can imagine that a guy like Warren Buffett has some kind of protection in his positions ?
 
I have a related question. If I place an order for any number of options on some random stock OTM and a few months out.. who takes the other side??

Is it a real human person market maker that manually takes the trade.. Or is it an algo that creates a delta neutral position against me?
 
You must log in or register to reply here.
Back
Top