Chapter 04 · Section 4.1

Quotes

In order to facilitate the trading process, it is usual on many exchanges for dealers to display two-way quotes: two prices, one to buy and one to sell for the same option series. Which of the following is a reasonable two-way quote?

• a) Bid 100, Ask 103
  Yes. The bid is always lower than the ask. The difference between the bid and the ask is called spread and is a source of profit for the dealer. Continue
  b) Bid 103, Ask 103
  c) Bid 103, Ask 100

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