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Trading floor · 2/8Market Making Dice
Desk · you are the market maker Total P&L 0.00 · rounds 0
25%
Settles at the sum of three dice
Traders (N noise · I informed · ↑ lifted your ask · ↓ hit your bid)
Click a left cell to set your bid, a right cell for your ask.
Briefing · Trading floor

Market Making Dice

Skill: two-way pricing, width, inventory, event riskFirm echo: Optiver, Flow Traders

Now you are the one quoting. The contract settles at the sum of three dice. Five traders arrive one at a time and trade 1 lot against your quote if they like it. Most are noise traders. Some have seen one die. Midway, one die is revealed to everyone.

  • Centre your quote on fair value (10.5 to start).
  • Width pays for risk. Too tight and informed traders pick you off; too wide and nobody trades.
  • Skew after a fill. If you sold, you are short: raise both prices so the next fill is more likely to be a sale to you.
  • Re-centre instantly when the die is revealed. Fair = revealed die + 7.
Shorthand
  • Start width ≈ 1σ of what you don't know. Three dice σ ≈ 3.0, so ±1 to ±1.5.
  • Lifted? Move up. Hit? Move down. Shift both sides by about a quarter of your width.
  • More informed flow → wider. Spread earned on noise must cover losses to the informed.
  • Known die collapses risk: two unknown dice σ ≈ 2.4, so tighten.
Reopen any time with How to play.