Zero sum game?

[samerh]

A question I've always had is around the "zero sum game" concept. When I buy a butterfly or condor, for example, is someone else selling a fly or condor or is ToS etc routing puts and calls in all manner of combinations to give me a fly?

Edited September 12, 2013 by samerh

[jfouche]

To my limited knowledge, the whole spread reaches the market makers, and they would go short the fly/condor until they can hedge through whatever other combination of calls/puts/stock they need. I imagine spreads also could match to customers too, like if some customer was happening to short the exact fly/condor you want.

[Kim]

Whoever is trading those options with us might end up with completely different position. Part of the spread can go to market maker, other part to another retail trader. Some might buy/sell as part of speculative trade or hedged position.

[samerh]

OK thank you both. So it gets split up and isn't a strict one-to-one.