Inventory PnL Mental Math
Inventory PnL mental math for market-making interview games, covering position, cash, mark, realized PnL, unrealized PnL, and examples.
Candidates who need better score and position tracking.
Track position and cash
In toy market-making games, each trade changes inventory and cash. Good PnL arithmetic starts by recording both before marking the position.
Separate realized and marked value
Cash from trades is realized in the game ledger, while remaining inventory is often marked at fair value or settlement depending on rules.
Concrete example
If you buy one unit at 48 and fair value is now 52, your marked gain is 4 before any fees or final scoring rules, because the current mark exceeds your cost.
Watch sign conventions
Long and short inventory have opposite exposure. A price increase helps a long position and hurts a short position, so write the sign before computing PnL.
Common mistakes
Candidates often remember the last trade price but forget inventory. PnL depends on the whole position, not only the most recent fill.
Practice the pattern
Use the LeetQuidity curriculum and calibration to turn this topic into a focused practice plan.