Market Making Quote Size Interview Questions
Market making quote size interview questions for deciding how much size to show based on confidence, inventory, and adverse selection risk.
Candidates whose market-making prompts include trade size or position size.
Size is another decision
A market-making quote can include price and size. The size says how much risk you are willing to take at that price.
Confidence affects size
When fair value is uncertain, smaller size can be cleaner than a large quote that exposes you to being wrong.
Concrete example
If you are confident fair value is near 100, you might quote 99 at 101 for more size than if your fair value estimate could easily be 90 or 110.
Inventory affects size
Near a position limit, reduce size on the side that worsens inventory and consider showing more size on the side that reduces risk.
Adverse selection affects size
If informed flow is likely, smaller size can limit damage while you learn from the market.
Common mistakes
Candidates often move price but forget size. In many trading games, size is the simpler risk-control knob.
Practice the pattern
Use the LeetQuidity curriculum and calibration to turn this topic into a focused practice plan.