Adverse selection in quoting
You quote a two-sided market and only ever get hit on your offer (you sell), never on your bid. What does this most likely tell you, and what should you do?
Show hints (2)+
- Why would flow only ever take one side?
- Informed counterparties trade against mispriced quotes.
Answer
Reveal answer →Final answer
Your quotes are too low and you're being picked off - raise your quotes
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Interview format: Market Maker, Hedge Fund Quant