Stopping Time Quant Interview Guide
Stopping time quant interview guide for information-available rules, optional stopping caveats, hitting-time examples, and common mistakes.
Candidates solving optional stopping and hitting-time prompts.
A stopping time uses current and past information
A stopping time is a rule for stopping that can be decided using information available up to that time. It cannot depend on future observations.
Hitting times are common examples
The first time a process hits a boundary is usually a stopping time because you know at that moment whether the boundary has been reached.
Concrete example
Stopping a random walk the first time it reaches plus ten is a stopping time. Stopping one step before its maximum over the next hour is not, because it requires future knowledge.
Optional stopping has conditions
Optional stopping results are powerful but not automatic. Bounded stopping times, integrability, and process conditions determine whether the theorem applies.
Common mistakes
Candidates often call any stopping rule valid. A stronger answer checks whether the rule can be evaluated without seeing the future.
Practice the pattern
Use the LeetQuidity curriculum and calibration to turn this topic into a focused practice plan.