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1. Determine whether to buy or sell based on your perceived edge.

  • Example 1: If the Market Maker has a bid price at 100 and your total expected value is lower than this value (e.g., 89), you would expect to profit from selling at this bid price.
  • Example 2: If the Market Maker has an offer price at 100 and your total expected value is higher than this value (e.g., 118), you would expect to profit by buying at this offer price.

2. Observe what others are doing.

  • The Market Maker’s initial offers will provide an indication of whether his/her Inside Info card value is above or below average. Use this information to adjust your total expected value accordingly.
  • If you notice other Traders are buying (or selling), then they probably have higher (or lower) than average numbers and you can adjust your total expected value accordingly.

3. Clearly articulate whether you are buying or selling and for how much.

  • Indicate whether you are buying or selling and what the bid/offer price is. Doing so will eliminate confusion and make it easier for both you and the Market Maker to record your transactions.
  • Example: “I’ll buy a security at your $110 offer price.”

4. Be alert during open trading.

  • The first person who puts in an order to the Market Maker gets the transaction!