Order Flow Market Making Interview Questions
Order flow market making interview questions covering trade direction, informed flow, fair-value updates, and repeated-trade interpretation.
Candidates discussing why counterparties trade with a quote.
Order flow is observed demand
Order flow is the sequence and direction of trades hitting your quotes. In an interview game, it can reveal demand, information, or just noise.
Trade direction matters
A buy from your ask and a sell into your bid have different implications for inventory and possible fair-value information.
Concrete example
If several counterparties keep buying at your ask, you may infer your ask is too low, your fair value estimate is stale, or the flow is simply one-sided demand.
Avoid overreacting
One trade is weak evidence. Repeated trades, trade size, and the prompt context determine how strongly order flow should move your quote.
Connect flow to updates
A good update explains whether the trade changed fair value, inventory risk, spread width, or only the next quote skew.
Common mistakes
Candidates often assume every trade is informed. The better answer allows for informed flow, uninformed flow, and inventory pressure.
Practice the pattern
Use the LeetQuidity curriculum and calibration to turn this topic into a focused practice plan.