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Cost of a market buy

Market makingMedium

The ask side of a book has $10$ units at $100.5$ and $40$ units at $101$ . A market order buys $30$ units and fills against the best prices first. What is the average price paid per unit? Give an exact fraction.

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Hint

Take the first level fully, then the rest from the next level.

Solution

The order takes $10$ units at $100.5$ and $20$ units at $101$ .
The total cost is $10 \times 100.5 + 20 \times 101 = 1005 + 2020 = 3025$ .
The average price is $3025 \div 30 = \frac{605}{6}$ .

Answer: $\frac{605}{6}$

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