There is no such thing as too big. When I was on the floor I use to see 5k and 10k options cross on a single trade. Guys would be tripping over each other to get that business.
You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
How many options ?
- Thread starter Profitman
- Start date
There is no such thing as too big. When I was on the floor I use to see 5k and 10k options cross on a single trade. Guys would be tripping over each other to get that business.
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?
How does someone take an order against you? LOL. Yes,if you are a buyer, he is the seller and vice versa. And why would it matter who is trading with you?
There is no such thing as too big. When I was on the floor I use to see 5k and 10k options cross on a single trade. Guys would be tripping over each other to get that business.
Thx, that's the kind of answers I'm looking for. Trust you understand my wondering, when I see "normal" OI on optioncontracts. Guess it's about sort of stocks I was talking about ?
Trust me, there is a lot of edge for them in those large orders. When you are done they will ask if you want any more. LOL.
Trust me, there is a lot of edge for them in those large orders. When you are done they will ask if you want any more. LOL.
One more question, does it effect prices(spread) a lot with those kind of orders ?
You are going to trade on his market. If that's what you mean.
No need to change prices, you will trade at his implied volatility.
How does someone take an order against you? LOL. Yes,if you are a buyer, he is the seller and vice versa. And why would it matter who is trading with you?
you didnt understand my question.. what im saying is that there are over 3000 US listed optionable stocks/ etfs each with countless strikes and expirations.. how many of those prices are actually a real person that is manually adjusting the bids/asks as opposed to an algo that does it automatically..
how many stocks can a single market maker really follow? and if a larger order came into to some random strike, an offsetting trade would need to be made to stay delta neutral.. i know people do it manually but hjow much of it is algos today in 2014?
My old firm specialized in this. Most traders make markets in certain baskets called bins. Each bin might contain 15 to 20 stocks. Traders set their vol curves and their skew along with size depended on edge being offered. Some traders also have their software automatically hedge their deltas at certain intervals. If the market vol shifts, it will pull the trader off the market and alert him/her to see what's going on and they can decide if they want to adjust their curves to the market or stay where they are at. It's all pretty boring for the most part. Traders are mostly keeping an eye out for large orders that hit the tape and making sure they don't get picked off.