Sometimes I see on the bid or ask size of 400, 500 or sometimes even over 1,000 on some options. If the volume is only say 2,000 contracts for this particular option per day, if I wanted to could I hit or take the bid or ask if I wanted to trade a very large size ? What would the impact be? I usually trade only 20-60 contracts , of course it depends on the premium. Thanks
assuming your broker will let you, sure! A large order in options can have two impacts, one is an increase or decreased in IVs. The second would be that the other side is a MM who would need to buy/sell stock to hedge, moving it in the direction to what you had just done.
============== Actually have seen 1 million contracts not change daily price at all in an index option; and 100 contracts per day ,same index move 10%+ . 2k daily is likely , in an option, excellant volume believe it or not; but absurd in a stock. =================== In all labor there is profit-Solomon trader king