Ah, very interesting. I had wondered how option writers managed their risk. I wonder how often this is the cause of the spikes I see on charts.

If word leaks that people are going to need to start hedging big then it could easily move 10 or 20 ticks away from you while waiting for your risk management team to approve your trade as not a fat finger.

That's why I would expect it to be done in software. Yes, I understand that software can be buggy, and hard-and-fast rules sometimes need to be bent, but I would still expect it to be cheaper overall. But I haven't actually worked in the business, so this is just my $.02 :-)