Suppose a stock is currently at 100. If there are more willing buyers of a stock (retail investors, institutionals etc.) at $110 than sellers (also retail investors, institutionals etc.), you would expect the stock to gravitate towards the price at which there is a balance between the buyers and sellers of that stock. Furthermore, if the stock was a microcap, and have few shares outstanding, and low volume on any given day, large institutionals have a limited way of participating in the upside of the stock (i.e. at most they can buy the entire company).
Now consider an American style option on public company like (AAPL or GME). If I buy a call option on GME, based on my understanding, in most cases, it is a market maker on the other side of the trade, selling me the call, and hedging appropriately with GME shares.
Does this mean that the options market's depth, even on a small company like GME is much greater than the underlying? In other words, does this mean that market makers will continue to buy or write options to the market's satisfaction without constraint (and without pushing up the price) like there is in the case of equities, where you are limited by the number of shares outstanding?
And if 1 is correct, does this mean that the market maker's view on the options "correct" pricing is what drives the option's pricing? For example, if an options market was extremely illiquid, and there were really only 2 players, Party A who is bullish on the price of the option, and Party B who is bearish. If Party A is willing to bet more on his view, then does the price of the option rise? Or is this largely negated by the market maker, in the sense that even if Party A's bets dwarfs Party B, there will always be the market maker who keeps the options price close to what the market maker thinks it should be priced at.
If there are any resources that one can point to to help me understand the mechanics / plumbing of how "price discovery" works for options, that would be great.