Options fill for larger orders questions

T

tango29

I have held off buying larger positions on some flyers on earnings plays as I was always wondering if I did hit one I may not get out of the trade because who is going to buy my sell if it has all ready run.
A couple of the more recent plays were TSLA, but I also had a small one on FedEx this week. I had thought of going large, for me maybe not the big swingers here. I think the open interest was around 2000 in the option I did and it hit good and I got out of my 50 contracts no problem. I was thinking when I put the position on of going up to as many 500 contracts depending on how close to my price it stayed.
Let's say I did fill 500 would I have been able to get out of them at the price, which was in the 40's. The expiration was this week they announced the wheels were coming off. Why would anyone buy at this point in volume? Or would I have been better going out the week after, which I had done with my TSLA positions. I went this week as they were dirt cheap flyers.
Thanks for any input and hope I am making sense in what I am asking.
 
With IB, when you want to do 500 option contracts, you can call their desk in Chicago and they will shop the order off market. Search on the IB website for large order desk.
 
ZBZB said:
With IB, when you want to do 500 option contracts, you can call their desk in Chicago and they will shop the order off market. Search on the IB website for large order desk.
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Approx. how long does that process take for large/custom orders to be filled vs smaller, standard, online self orders that happens in seconds?

If I wanted to fill 1,000 or 1,500 options contracts how long would that take?
I don't use IB, I use Fidelity, but I would assume the process is more or less the same thing.
 
Very dependent on the name and how many venues it is listed on. If you can purchase, delta shares and there is some liquidity it would be slower, but probably under a minute. If it is multiply listed probably under 5 seconds. The process can vary because of dark liquidity so some brokers don't have access. My personal bias would be Fidelity because they are a participant.
 
I'm not with IB anymore, so this was through Schwab. I'm guessing I can call them to work it also. Part of my question, would I find buyers when the option is going off the board Friday, and I suppose Saturday settle. It was huge in the money, but it only had a day left after FDX's announcement. Why would someone or group look to buy. I get some short covering, but would I likely have gotten enough to cover all the positions? The 50 covered quickly, but would in the range of 500? Again I think the open interest was roughly around 2000.
I get that even of all didn't fill I was still way ahead, but am curious for future plays.
Thanks
 
Again name dependent and news dependent in this case - liquidity has a price. Unless there is a material omission of fact it could get done. You will generate a large option report so it better be a trade where all public information is in the marketplace. How many venues does the name list? Open interest may be irrelevant if the stock is liquid. When TMX was hot you could do 100,000 open with zero open interest, because you could move 1,000,000 shares of stock with a narrow market. 16 exchanges with 16 primary MMs - so the matrix probably shows enough info to give you a sense of liquidity. Depends how many venues it lists as a first estimate of liquidity.
 
ETJ said:
When TMX was hot you could do 100,000 open with zero open interest, because you could move 1,000,000 shares of stock with a narrow market. 16 exchanges with 16 primary MMs - so the matrix probably shows enough info to give you a sense of liquidity.
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What about the S&P, SPX....since it's huge....could I move like 2,022 options with Fidelity instantly? or would i need to go that custom, slower, manmade, route? How large, theoretically, can an order go through online in a snap second?
 
Depends on the conditions. SPY under ordinary circumstances is 50,000 to 100,000 up all venues. SPX, again depends on the condition, but 5,000 to 10,000 quickly, but the devil is in the details of conditions. Depends on where your broker would shop it. Given SPX contract size they are both about the same.
You are asking about the most liquid issues so given the ability to gather liquidity - maybe - 10X to 20X.
 
ETJ said:
You are asking about the most liquid issues so given the ability to gather liquidity - maybe - 10X to 20X.
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Imagine making a million dollars in a day,
and trading it as fast, easily, effortlessly and swiftly as if you are processing just 5 contracts.
 
I put it in the first post, but the stock was FDX. In the past it has been TSLA. Volume on FDX was way above normal that day.
 
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