I was having a discussion on another message board about option pricing. I was going by what McMillan says in "McMillan on Options" that there are just way too many strike prices, expirations, etc, for it to be done manually, that computers handle the whole mess. The other person was saying that MMs can manipulate prices (like they do with stocks), especially if they are OTM. I know there are some former floor traders here, what say you?
early on prices were set by roll and spread values... now it is electronic...most floor traders are robots...machine says buy...machine says sell... most firms trade as a monolith and adjustments are made upstairs...