medium · Market Microstructure
A risk-averse dealer uses a quote-shading parameter κ = 0.0001.
If the dealer's target inventory is 0 and their current inventory is +10,000 shares (long), what is the shift in the dealer's quote midpoint relative to the market midpoint?
- 0.00
- -1.00
- +1.00
- -0.10
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