Who Takes The Other Side Of Huge Orders?

Arnie Guitar

Arnie Guitar

When I see Najarian on CNBC talking about absolutely huge Call option buys, what was that one last week, 30,000 contracts representing 3M shares?

Who takes the other side?
 
Often - not always - it's a facilitation trade done on multiple exchanges - with a good portion done by the brokers/banks. An OPRA feed will show the nature of the contra parties. Frequently trades this size are done as part of a structured product and other times they are part of a capital markets transaction. Then again sometimes they are just large trades. Look for large blocks of the underlying as that can sometimes offer a clue.
Commonly the largest piece will be on the PHLX for fee capping.
 
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ajacobson said:
Often - not always - it's a facilitation trade done on multiple exchanges - with a good portion done by the brokers/banks. An OPRA feed will show the nature of the contra parties. Frequently trades this size are done as part of a structured product and other times they are part of a capital markets transaction. Then again sometimes they are just large trades. Look for large blocks of the underlying as that can sometimes offer a clue.
Commonly the largest piece will be on the PHLX for fee capping.
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Thanks for the info on structured trades. Sometimes, I also spot combined underlying/options block trades, but it is hard to judge the direction, since probably the trades are pre-arranged and the closeness to the bid or the ask means nothing. As you said, however giving a look to OPRA data can help. Also, Felix Frey and others claim that by looking at the IV you can infer the option trade direction (IV increases after being hit), but I have found that this is rarely the case, expecially with pre-shoppped trades.
 
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