Re 1. This would depend on the (theoretical) profit the MM makes. If the b/a is 0.50@0.56, an order of 2000 at 53 wouldn't really go fast since it's at the theoretical fair value. If you would lift the offer or 56, even initially for 100 and bid on for the rest... it should go fast depending on the risk involved. First risk is delta, is it easy to hedge the deltas without a lot of slippage. Second risk is vega, how much vega exposure is in the trade for the MM? Third gamma, how much gamma exposure has the trade? If say the trade is directly opposite the general vega/gamma position the MM already has on the book, he would trade more quickly, since it actually lowers the risk for him. The entire trade might even get traded at the midpoint of 53 very quickly if it fits within their book. If it adds to his position, he would want more profit potential... so maybe a higher price. Re 2. MM's look at their general position, mainly delta/gamma/vega. If it's out of wack, they will do trades to offset that. There are multiple options series that all have their own delta/gamma/vega and MM's initially hedge options with options in the same stock. If not possible, hedge with related stocks... or ultimately balance with Index. Of course, a large trade in a highly illiquid stock which tend to move entirely on it's own... (zero beta)... MM's have more risk and they set their quotes wider, so they keep their profit potential.
SPX options.. the spread are wide... SPY.. spreads are most of the time 1 cent.. can u get better... !!!!