How Does the ‘Moneyness’ of an Option Contract Affect the Expected Fill Rate for a Market Maker?

Options that are near-the-money (ATM) or slightly out-of-the-money (OTM) typically have higher expected fill rates because they are the most actively traded and liquid. Deep in-the-money (ITM) or far OTM options are less frequently traded, leading to lower expected fill rates.

Market makers often quote tighter spreads on ATM options to capture this higher volume.