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Trimming resting bids

Market makingMedium

A market maker holds a position of units long and may hold at most units long or short. Resting bids total units, made of levels of units each. By how many units must the resting bids be reduced so that, even if every remaining bid fills, the limit is not exceeded?

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

Hint

Find the largest total bid size that fits under the long limit.

Solution
  1. The room under the long limit is units.
  2. The resting bids total units, which exceeds that room.
  3. The bids must be reduced by units.

Answer:

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