Who takes the opposite position in a trade?

W

Wil Klem

When entering an option position who takes the opposite position? people trading in the marketplace? or the board of exchange if there sre no takers in the marketplace?

Thanks for your replies and advice.
 
exchanges dont take to other side. they are just a big back office.
depending on the option market either a market maker or anyone in the world
 
Thanks for your replies. Please give me a general idea of what constitutes "the big, liquid stuff". Is it open interest and volume? If so, what kind of numbers are a guideline on both stocks and options?

Thanks for answers to these questions.
 
Focusing on the "big, liquid" stuff is not a very efficient use of capital for a retail investor. The big options trading firms and funds focus on the liquid big names because they have to deploy millions in vega. A lot of edge is in the small illiquid names. MSFT might be mispriced by 2 vols. A 300MM market cap name with a few thousand contracts of OI could be mispriced by 20 vols and you will have plenty of liquidty for your size in both.
 
You must log in or register to reply here.
Back
Top