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Edge on a bought block

Market makingEasy

A contract has a known fair value of . A market maker buys units from a seller at . What is the total expected edge of this trade?

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A whole number, a decimal, a fraction like 3/8 or a percent.

Hint

Edge per unit is fair value minus the price paid for a purchase.

Solution
  1. The edge per unit is .
  2. The trade covers units.
  3. The total expected edge is .

Answer:

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