MarketSmith

MarketSmith is a fast-paced market-making and liquidity provision simulation designed to test participants’ understanding of bid-ask spreads, pricing, and risk management. Participants act as market makers, continuously quoting Bid and Ask prices for assets while aiming to maximize P&L and maintain a neutral delta. Success depends on accurately estimating the fair value of assets using clues provided and efficiently capturing the spread through trades with other participants. Eligibilities: Open to all students Individual participation only   Timeline: Round 1 : Feb 22th Round 2 : March 14th   Problem Statement: Participants must function as market makers in a simulated trading environment. Using partial information and clues provided, they must: Estimate the expected value of assets (eg - dice, cards etc.) Provide competitive Bid and Ask quotes Trade with other participants Maximize Profit and Loss (P&L) while managing inventory risk   Round 1 – Online Round: Participants will be divided into groups Each group will be assigned a trading table Participants trade among themselves by quoting prices based on estimated market value Performance will be evaluated based on PnL, pricing accuracy, and risk control   Final Round: Top performers from Round 1 qualify Finalists compete in a single trading table Highest-performing market makers will be ranked and declared winners Submission Requirements & Deliverables: No prior submission required All trading decisions and quotes must be submitted live during the simulation as per the platform/rules provided Real-time bid and ask quotes during the event   Guidelines: Participants must adhere to the trading rules explained before the round Fair play is mandatory; collusion or manipulation will lead to disqualification Decisions must be based solely on information and clues provided during the event Organizers’ decisions will be final and binding