How Do Options Trading Strategies Utilize Non-Public Liquidity Venues?

Large institutions executing complex options strategies often need to hedge their positions or take large directional bets without signaling their intent to the broader market. Non-public venues, like OTC desks or specialized dark pools, allow them to source the necessary liquidity for the underlying asset or the option contract itself.

This ensures minimal market impact, better execution prices for the legs of the strategy, and protects the proprietary nature of their trading strategy.