The break-even spread when some traders know the answer
Asked at Jane Street
A stock is worth either \100$90\tfrac12$95\alpha = 0.3070%$ are uninformed and buy or sell at random, fifty-fifty, regardless of value.
You must post a bid and an ask that earn zero expected profit per trade, the competitive spread.
Derive the break-even bid and ask.
Your answer
This one is open-ended. Work it through, then check your reasoning against the full solution.