Market Making Common Mistakes in Quant Interviews
Market making common mistakes in quant interviews, including missing fair value, over-tight quotes, ignored inventory, weak updates, and unclear communication.
Candidates doing market-making practice review.
Quoting without fair value
The most basic mistake is giving bid and ask before saying what you think the market is worth and why.
Quoting too tight
A tight spread can look confident but may be fragile when uncertainty, adverse selection, or inventory risk is high.
Ignoring inventory
After trades, your position changes. A quote that made sense at zero inventory may be wrong after you become long or short.
Weak trade updates
A trade can contain information and always changes inventory. Candidates should explain which effect matters and how the quote responds.
Poor communication
In live games, the interviewer needs to hear the logic: fair value, spread, skew, and update. Silent arithmetic is hard to evaluate.
Common mistakes
The meta-mistake is treating market making as one formula. It is a repeated reasoning loop under uncertainty.
Practice the pattern
Use the LeetQuidity curriculum and calibration to turn this topic into a focused practice plan.