A market order that constitutes a large option purchase transaction entered into by an institution. The aim is to execute at the ask price expiring in a relatively short period of time at a price exceeding the current price. The option involve a certain number of underlying securities (e.g., stock).
The market order is sliced into a number of segments to take advantage of all available contracts at the best prices currently available across all exchanges and venues. By doing so, the trader is said to be “sweeping” the order until it is executed in its entirety. These smaller orders are executed just milliseconds apart.
These type of sweep orders can be beneficial to institutional investors for the speed of filling and ability to conceal transactions. Traders in the market will not be able to know what is going on, and hence cannot take advantage of lower prices.
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