Markets, lesson 8
Make a market on a number
The interview game: fair value in the middle, half the spread per trade.
You've quoted a bid and an ask around a guess, and seen why the spread has to pay for traders who know more.
Part 1. Two dice
The interview version: make a market on the sum of two dice. You say a bid and an ask, the other side buys or sells, the dice roll, and you settle.
Make a market on two diceLive
"6.5 at 7.5" means you'll buy at 6.5 and sell at 7.5. Nobody knows the roll, so the only edge is the one your prices give away.
Part 2. Fair value is an average
Keep going with Pro
You've done the first part. Pro opens the rest of this lesson, and every other one.
Still to come
- Fair value is an average
- Score what you hold
- Inventory you didn't choose
- A worked problem
- The same thing, for real
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