Market Making Range Estimate Interview Questions
Market making range estimate interview questions for converting low-base-high estimates into midpoint, spread, and skew.
Candidates who need to convert uncertainty ranges into market-making quotes.
A range shows uncertainty
A range estimate says more than a point estimate. It tells you both the center of your belief and how wide the quote may need to be.
Choose a midpoint
The midpoint can be the base case, an average of scenarios, or another stated estimate. Say why the midpoint is reasonable.
Concrete example
If your plausible range is 40 to 60 with base case 50, a first market might center near 50 and use a wider spread than a range of 48 to 52.
Spread reflects range width
The wider the plausible range, the more protection a market maker may need against being picked off.
Update the range
New information can move the whole range, narrow it, or widen it. Explain which happened before requoting.
Common mistakes
Candidates often state a range but quote as if they had certainty. The range should influence the spread.
Practice the pattern
Use the LeetQuidity curriculum and calibration to turn this topic into a focused practice plan.