Market Making / Statistical Arbitrage / Proprietary trading houses

#1

I think it’s relevant to have a thread containing interview advice for firms such as Tibra, Optiver etc.

These firms are small trading houses that rival the Bulge Bracket when it comes to recruitment standards, and compensation is said to be above Bulge Bracket in some cases.

Has anyone had experience with the actual interview stages with any trading houses? While they don’t actively seek finance graduates, their questions tend to include more technical questions than standard IB interviews, with a heavy focus on numerical and quantitative skills.

Possible questions include:

  • On the spot numeracy questions, i.e 5.4 x 3.2.
  • Competency questions, i.e standard IB style “Explain a time when you’ve led a team”.
  • Technical questions, i.e. “Explain the concept of arbitrage”, ranging to advanced questions such as “Outline the main variables in the Black Scholes model”.

Any and all input is welcome - I believe Chris has worked in a trading house before, so maybe he can give some direct input?

#2

I have done the 1st of three stages for Optiver numerical test. It consisted of 80 multichoice questions of what is fairly simple mathmatics such as 3.68.7 or 0.97/0.014 not hard questions but time is major constraint an bascially unless you can see te answers immeadiately your screwed as you dont have time to write them down. My top tip for this is to learn all the tables all the wy up to 2525 so you can recite them at memory in flash and to work on fractions as i know that since i left school i havnt used a single fraction so had to re learn how to use them etc again not hard stuff but you have to be super sharp to get these as quickly is required.

The pass mark for the first stage varies but is normally around 55-60/80 for the 10 minute test. Out of 30 people in my test group only 3 made it through the first stage. And there were alot of very very intelligent people there so good luck to all who take it.

ps its negatively marked so for every one wrong you lose 2 marks, for every one left blank you lose 1

#3

Good input Rasputin.

Just had a telephone interview with a US based market making house, they rang from NY. Seems like US interviews are more concerned with technical and numerical skills than competencies.

I was asked:

*23 x 34
*34^2
*A coin is flipped 4 times. What is the probability that more than 2 coins are heads?

I wasn’t allowed to use paper or a calculator. There was a couple more questions, mainly statistics and probability. Considering this is the first of 3 or 4 telephone interviews, It’ll be interesting to see how difficult the questions can get.

#4

Reg you will probably find that thats the hard stuff out th way now and the rest is competency based etc good luck with that iv given up on trading for now and am pursuing a different route for a few years as i need some money and this is just to competitive to be reliant on

#5

Reg, if I’m guessing the right ‘US based market making house’, you haven’t got the hard stuff out of the way. There are three of four phone interviews, and they get sequentially harder. There are almost no ‘fit’ or competency questions.

Rasputin, the first stage of the Optiver tests is where they eliminate almost everyone. In my group, only four of us made it past the first round, but of the four, three of us got through all three tests. After that, there are just two basic interviews.

Does anyone out there know much about the differences between these market making firms?

#6

pi_1 - It was for Jane Street Capital, a hedge-fund style prop trading house. I didn’t make it unfortuantely. Got all the questions correct, but took too long to get an answer for the last probability based question.

#7
#8

Hi, thinking of applyin for one of these market making firms myself but wanted to see if anyone had any feedback on how these compare to IBs in terms of:

  1. is the type of work very similar?
  2. is the compensation comparable? base and bonus%? for both traders or developers
  3. sounds like the interview process is very difficult - how does it compare to to IBs?

Thanks

#9

I am looking to apply to one of these Market Maker Trading firms. I’ve only heard of Jane Street, Optiver, and Tibra.
Does anyone have a list over other London or NY ones?

Also, any idea how much they pay (salary and bonuses) ?

Finally, does anyone know of a website with practise questions like the number and probability ones given above?

Thanks for any help with any of these questions.

#10

Liquid Capital

IMC

Metraders

those are the few I can remember right now!

Jane Street Capital is awesome! I think their salary package is the best… their interviews are based on brainteasers and maths questions… nothing else! I interviewed with them… went to the second round… then got turned down… both the rounds were telephone interviews - first round from London, second round from NY.

#11

Thanks IBD, if you remember any others, i’d be grateful if you’d let me know.

#12

Hello Rasputin

I will have a phone interview with the Optiver Hr and I would be glad to have your advices.

Thank you very much

#13

Hello Pi-1,

I will have a phone interview for a wholesale Trader position next week. Would you please to provide me any advices?

Thank you very much!

#14

Hey peeps,

Last week, I did a test at Flow traders. After a telephone interview I had a IQ-test and a numerical test. Unfortunately, I didn’t make the numerical test, I was to slow. Now found a site for speeding up my calculations: calculationrankings.com. I’m practicing there for my next test at IMC in two weeks