easy · Volume Price Analysis vpa-core
A market maker in XYZ Corp quotes a bid of $22.10 and an ask of $22.25.
If they execute 10,000 shares on both sides (buying at bid, selling at ask), what is their gross profit from the spread, and how does this relate to the 'Wholesaler' analogy?
- $1,500; they profit by selling inventory at a discount to attract buyers.
- $250; they only profit when the price of the stock increases significantly.
- $1,500; they profit by buying at wholesale (bid) and selling at retail (ask).
- $150; they profit from commission on the 10,000 shares.
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