The Two-Way Price Strategy
Don't reveal your hand; read other players by making them reveal theirs.
The Two-Way Price Strategy is Gary Stevenson's foundational framework for competitive advantage, derived from his experience winning Citibank's trading game competition. The core insight is that in any competitive exchange, the person who reveals their position first loses their advantage. Instead of declaring what you think something is worth, you should focus on discovering what everyone else thinks it is worth, and then exploit the gaps between their positions.
In financial markets, this manifests as the two-way price system where traders must quote both a buy and a sell price without knowing which side the customer wants. The same dynamic applies to negotiations, salary discussions, and any competitive information environment. The person who gathers the most information while revealing the least has a structural advantage that compounds over time.
Stevenson demonstrated this by winning the trading game not through superior mathematical calculation, but by rapidly asking other players for prices, reading their hands from their quotes, and then positioning himself to buy from low-quoters and sell to high-quoters simultaneously for risk-free profit.
- You don't make money by being right; you make money by being right when others are wrong.
- Individual traders don't set the price; the market sets the price based on what everyone else thinks.
- If someone looks like they know what they are doing, and you have no clue, copy that person.
- The person who asks for prices learns more than the person who declares them.
- Rich people expect poor people to be stupid, and that expectation is itself exploitable.
- Study the Game Before PlayingBefore entering any competitive situation, invest disproportionate time understanding the rules, incentives, and common strategies of other players. Stevenson spent three weeks doing nothing but playing practice rounds of the trading game while competitors relied on day-of mathematical calculation.Pro tipThe best preparation is not theoretical knowledge but simulated practice under realistic conditions.WarningDon't confuse understanding the rules with understanding the game. The rules are just the starting point.
- Gather Information Before CommittingIn any competitive exchange, ask others for their position before revealing yours. When Stevenson entered each round, he immediately asked other players for their prices, cataloguing what their quotes revealed about their hands and strategies.Pro tipFrame your information-gathering as casual or even slightly confused. People reveal more to those they underestimate.
- Identify the Spread Between PositionsLook for gaps between what different parties believe. When one player quoted 50-52 and another quoted 67-69, Stevenson identified a guaranteed 15-point profit by buying from the low quoter and selling to the high quoter. In any negotiation or market, these spreads represent risk-free value.WarningSpreads close quickly once other participants notice them. Speed of execution matters as much as identification.
- Use Misdirection to Widen Your AdvantageOnce you understand the landscape, actively influence others' perceptions. Stevenson would loudly quote prices that implied the opposite of his actual position, using volume and confidence to anchor other players' quotes away from true value. He would bluff low when holding a high card and vice versa.Pro tipYour background and appearance can be strategic assets. Stevenson exploited others' assumptions about a working-class kid in a hoodie to make his bluffs more credible.WarningOver-bluffing destroys credibility. Use misdirection selectively when the payoff justifies the risk.
- Execute Decisively When You Have the EdgeWhen you identify a clear information advantage, commit aggressively. Stevenson racked up hundreds of trades in the final round, knowing his -10 card gave him a huge edge. Half-measures in competitive situations often leave money on the table while still exposing you to the same risks.WarningDistinguish between genuine edge and overconfidence. Even Stevenson's aggressive play was grounded in mathematical certainty about his card value.
Stevenson entered the Citibank trading game competition having studied the rules for three days before other competitors heard them. While economics students calculated expected values and quoted prices that revealed their cards, Stevenson rapidly asked for prices from every player, identified the wide spreads between their positions, and bought low from pessimists while selling high to optimists. He accumulated risk-free profits of over 100 points in the first minute while competitors were still working their calculators.
In the final against top students from Oxford, Cambridge, and other elite universities, Stevenson adapted his strategy. Since finalists would be sophisticated enough not to quote widely different prices, he instead used loud, confident price-setting to anchor the market and bluffed the opposite of his actual position. Holding a -10 card, he loudly quoted high prices to push the market up, then quietly accumulated sell positions at inflated prices.
On the actual trading desk, the two-way price mechanism gave Stevenson's desk a structural advantage. Customers who needed to trade FX swaps had to request prices from the bank, and the bank always quoted a spread, buying at a lower price and selling at a higher one. This meant the desk generated near-guaranteed profit from the flow of customer business, much like an airport foreign exchange counter profits from tourist transactions.
Stevenson developed this framework while preparing for Citibank's national trading game competition at the London School of Economics. While other students, trained in economics and statistics, focused on calculating expected values from their cards, Stevenson spent three weeks practicing the game obsessively. He realized that the mathematically sophisticated students would reveal their card values through their pricing, creating exploitable information asymmetries. His friend Sagar Malde gave him a crucial insight: privileged people expect underprivileged people to be unsophisticated, making his bluffs more believable.
This approach won him the national competition and ultimately his career at Citibank. It became the template for how he thought about all competitive interactions going forward.