On my list is one particular call, about 3 months out with OI of 460. Hasn't traded much recent days and the spread is 7.80-8.50. If I wanted to trade a 10-lot and pay the ask, would the MM fill that right away? Will the MM usually take just about any trade at the Bid or Ask?
I assume Robert Morse will chime in, but yes that ask is legit and must be filled. That said, you would never buy at the ask anyway. The usual process is to place a limit order at the mid and wait. Then slowly increase your bid in small increments until you fill.
You don't know who is quoting at the ask or what their motivation is. What you can do is simply look at the ask size. You should be able to get a fill at that price of at least to the ask size.
In general, a market maker will trade with you when their system sees an edge. The open interest is only important if you expect to trade with other customer orders, not the MM. They don't care if they are opening or closing. What I do for wide markets, is determine the most I will pay for an options with the stock trading at the price, then enter an order lower than that, and move my limit up every 5 to 10 seconds looking for liquidity and a seller. I call this walking my order up. I find it works well, unless the order size is quite large. then I would do the same thing but with an iceberg order to hide my size.
Fidelity Active Trader. Oops... I checked and can add Bid and Ask size columns.. the default setting didn't include those.
Who else will trade with you? Most option trades are done with a MM unless you are in a liquid symbol like SPY, QQQ or AAPL.