Market Making After-Trade Update Interview
Market making after-trade update interview guide for revising fair value, inventory, spread, and quote skew after a counterparty trades.
Candidates practicing interactive quote-and-trade interviews.
Observe the trade side
The first fact is whether the counterparty bought from your ask or sold into your bid. That determines both inventory direction and possible information.
Separate inventory from information
A trade always changes your position, but it may or may not change fair value. Explain both effects separately.
Concrete example
If someone sells into your bid, you become longer. You may lower future bids to avoid getting longer and consider whether the sale signals lower fair value.
Revise spread if uncertainty changed
A surprising trade can justify widening the spread. A clarifying trade or external signal can justify tightening it.
Make one defensible update
In fast games, a simple fair-value move plus an inventory-aware skew is usually clearer than a complex unexplained quote.
Common mistakes
Candidates often update only the midpoint or only inventory. After a trade, both the information story and position story should be checked.
Practice the pattern
Use the LeetQuidity curriculum and calibration to turn this topic into a focused practice plan.