Akuna Capital → Options Market Maker
A question asked in interview: expected value questions, if you have a coin and flip it 5 times and its all heads in a row (so 5 heads) if you win you get 28 dollars if you lose than you get 0 dollars, so how much will you pay upfront to play this game next questions, if we repeat above 5000 times then how much will I pay
Akuna Capital Options 101
Terminology and Trading Floors
- Bid = highest price someone is willing to pay
- Ask / Offer = lowest someone is willing to accept
- Size = amount of contracts someone is willing to trade at a price
- Market Making = provide both a bid and an ask price and sizes for each Example current price = 64 bid = 60 x 4 (size) ask = 68 x 10 (size) so it can be said as I’m 60 at 68, 4 by 10
- Spread = difference between bid and ask
- Hedge = A trade or investment to reduce the risk of price movement in an asset