What Is the Role of a “Wholesaler” in Providing Price Improvement in Options Trading?

A wholesaler is a market maker who specializes in executing retail options orders, often taking the other side of the trade. They provide price improvement by executing the order at a price inside the prevailing public bid-ask spread, typically a penny or fraction of a penny better.

They profit by quickly hedging the position or by capitalizing on the difference between the execution price and the true fair value, while providing a benefit (price improvement) to the retail trader.