SIE (Securities Industry Essentials) Practice Exam

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If a market maker posts a quote of 10.00 - 10.10 [25×10], which of the following actions is the market maker willing to take?

  1. Buy 2,500 shares at $10.00 and sell 1,000 shares at $10.10

  2. Sell 2,500 shares at $10.00 and buy 1,000 shares at $10.10

  3. Buy 1,000 shares at $10.00 and sell 2,500 shares at $10.10

  4. Sell 1,000 shares at $10.00 and buy 2,500 shares at $10.10

The correct answer is: Buy 2,500 shares at $10.00 and sell 1,000 shares at $10.10

The market maker is willing to buy 2,500 shares at $10.00 and sell 1,000 shares at $10.10. They are not willing to buy or sell 1,000 shares at $10.00 or $10.10, as this would not meet their posted quote. Additionally, they are not willing to buy 2,500 shares at $10.10, as this would mean buying at a higher price than their posted quote. The correct answer is the only option that aligns with their posted quote and meets the specified stock quantity ratios.

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