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Round-trip position P&L

Market makingEasy

A market maker buys $5$ units at $20$ and later sells $3$ units at $22$ . The current mid price is $21$ . What is the total profit, counting the remaining position at the mid price?

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Hint

Cash flow plus the market value of what is still held.

Solution

Cash is $- 5 \times 20 + 3 \times 22 = - 100 + 66 = - 34$ .
The remaining position is $2$ units, worth $2 \times 21 = 42$ .
The total profit is $- 34 + 42 = 8$ .

Answer: $8$

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