Specific Open Interest Question

Discussion in 'Options' started by 9torque, Jan 9, 2011.

  1. 9torque

    9torque

    I have a specific question as to 'open interest'. I know what open interest is, what it represents, how its change can reveal information.

    Assume the open interest is 100...which is usually the minimum that I look for before establishing any position of any kind whatever the play might be.

    Let's say I want to buy 400 options where the open interest is 100.

    Let's say I want to buy 2000 options where the open interest is 100.

    Let's say I want to buy 5000 options where the open interest is 100.

    Where is the 'tilt' point? What is the maximum one could buy without rattling the option specialist given an open interst of 100?

    I'm talking about liquid options with fair spreads....not MSFT, CSCO, et al...but liquid options with less liquidity than the most liquid...yet still sufficiently liquid with spreads typically less than 0.10.

    Where is the tipping point as measured in the number of calls or puts here one can buy without making waves in the market, given that environment.


    This is a liquidity question...and nothing more.

    Thank you.


    9torque