I'm guessing you know what is a Market maker right? For the ones who don't know, a Market maker is a firm that is assigned certain names to quote on. MM can have many hundreds thousands series for which they need to provide quotes (this can be up to a million). Quote updates are calculated automatically when there is a change in the underlying price. And guess what, they are using computers to do so (and it's been like that for the last 25 years). They don't have thousands of individuals who enter manual quotes. It's all done automatically (using computers and software). If you see an offer at 6.50$, it's not because a person has decided to put that particular quote on the market (for whatever reason!). Also, MM have obligations that are regulated and monitored by exchanges, on a daily basis. Btw, this is not my opinion, these are facts. I personally don't have a good or bad opinion about MM. In the diluted US option market, they are a necessity.
The key phrase of this thread is..."with it all the margin requirements for the traders..." You tipped your hand. A movie worth watching..."Margin Call". Who said markets (options) have to act rationally?? Remember when oil went negative??