You're not understanding what I'm saying... as a market maker you charge a premium in vol terms in the big ask for sensitive contracts. Also I work as a MM... so I think you misunderstood where I was coming from haha.
Mark -about ur post . "Keep in mind that when everyone buys options, the MM has no good way to hedge risk, other than to get delta neutral with stock. That is not a safe way to hedge a portfolio. " what is there is results after hours and at the last few seconds of trading. someone comes in and buys a huge Qty of options. what does the MM do. . since there is no time left to attract sellers, how do they reduce exposure.. hedging with stock is not a good way. as , that exposes to infinite theoritical losses.. This definitely must be complicated,: all unbalanced trades.. matching buyers with sellers and taking the spread , does that profit help offset the losses by wild swings for the unbalances unhedged positions?