Finicade
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Level 8 · ◆◆◆◆ · ~13 min

Adverse Selection

Adverse Selection

"The counterparty chose to trade with you. That single fact is bad news, and pricing exactly how bad is the market maker's whole job."

the winner's curse in tradinginformed vs uninformed (noise) tradersconditioning on the trade itselfwhy fills are informativethe lemons problem applied to markets
🚀 You're jumping ahead. This builds on The Market Maker's P&L — but play it now and you'll still earn full XP. If it feels steep, those make a gentler on-ramp.

A short lesson, then a quiz. ❤️×3 — a wrong answer costs a heart; finish with at least one left and the level is yours. Lose all three and you'll have to try again. Replay any time — XP and cleared levels are never lost.