Best Time To Buy And Sell Stock Iii

To solve this coding challenge, we need to carefully analyze the problem requirements and constraints: we can perform at most two transactions, which means we can buy and sell the stock up to two times. Our goal is to maximize our profit from these transactions. Let's break down how to approach this problem step-by-step and represent it in pseudocode with detailed explanations and comments.

Explanation

  1. Initialization : We need four variables to manage our profits:
    • first_buy
      : This will keep track of the maximum profit when we buy the stock the first time.
    • first_sell
      : This will store the maximum profit after selling the stock the first time.
    • second_buy
      : This will keep track of the maximum profit after buying the stock the second time.
    • second_sell
      : This will store the maximum profit after selling the stock the second time.
    • Initially, set
      first_buy
      and
      second_buy
      to negative infinity because when we buy a stock, the profit is negative, and a very large negative value ensures it gets updated correctly with the first price we encounter.
      first_sell
      and
      second_sell
      should be initialized to 0 because we start with zero profit.
  2. Iterate through Prices : We iterate through the list of prices and update our four variables to track the maximum possible profits at each price:
    • Update
      first_buy
      to the maximum of its current value and the negative price of the current day (because buying decreases profit).
    • Update
      first_sell
      to the maximum of its current value and the profit we would have if we sold the stock today (i.e., the sum of
      first_buy
      and today's price).
    • Update
      second_buy
      to the maximum of its current value and the profit we would have after selling once and then buying again (i.e., the difference between
      first_sell
      and today's price).
    • Update
      second_sell
      to the maximum of its current value and the profit we would have if we sold the stock after the second buy (i.e., the sum of
      second_buy
      and today's price).
  3. Return Result : After iterating through all the price values,
    second_sell
    will contain the maximum profit achievable with at most two transactions.

Detailed Steps in Pseudocode

                                            
# Initialize variables
first_buy = negative infinity   # Maximum profit after first buy
first_sell = 0                  # Maximum profit after first sell
second_buy = negative infinity  # Maximum profit after second buy
second_sell = 0                 # Maximum profit after second sell

# Iterate through the prices list
for each price in prices:
    # Update the maximum profit after the first buy
    first_buy = max(first_buy, -price)

    # Update the maximum profit after the first sell
    first_sell = max(first_sell, first_buy + price)
    
    # Update the maximum profit after the second buy
    second_buy = max(second_buy, first_sell - price)
    
    # Update the maximum profit after the second sell
    second_sell = max(second_sell, second_buy + price)

# The second_sell contains the maximum profit achievable with at most two transactions
return second_sell

                                        

Explanation

By following these steps, we ensure that we:
  • Capture the most profitable opportunity for the first transaction.
  • Correctly account for the impact of potential second transactions.
  • Ultimately return the best possible profit after two transactions, considering all price changes in the given list.
Let's walk through an example
Given
prices = [3, 3, 5, 0, 0, 3, 1, 4]
:
  • Initialize variables:
    • first_buy = -inf
      ,
      first_sell = 0
      ,
      second_buy = -inf
      ,
      second_sell = 0
  • Iterate through prices:
    • For price = 3:
      • first_buy = max(-inf, -3) = -3
      • first_sell = max(0, -3 + 3) = 0
      • second_buy = max(-inf, 0 - 3) = -3
      • second_sell = max(0, -3 + 3) = 0
    • For price = 3 (second time):
      • first_buy = max(-3, -3) = -3
      • first_sell = max(0, -3 + 3) = 0
      • second_buy = max(-3, 0 - 3) = -3
      • second_sell = max(0, -3 + 3) = 0
    • Continue this process for all prices...
Eventually:
  • For price = 1:
    • second_sell = max(6, 2 + 1) = 6
Thus, the maximum profit is
6
after considering two transactions.
Through this detailed approach, we ensure that each variable is updated logically to reflect the highest possible profit at every step in the process.