Trading interview scenario round.
You are long and you do not want to be
The question
You have been lifted repeatedly and are now long well beyond your limit. What do you do with your quote?
Have a go before you open the solution. If you are stuck after a few minutes, the first paragraph below is usually enough of a nudge.
Show the worked solution
The answer
Skew it down, keeping a two-sided market, so the flow you attract reduces the position.
Pull the whole quote lower rather than simply widening it. A lower bid and a lower offer makes buying from you cheaper and selling to you less attractive.
Keep both sides live. Withdrawing entirely tells the market what your position is and can be worse than holding it.
Size matters too: show more on the offer than the bid so the flow you get is the flow you want.
Interviewers watch for candidates who freeze or who double down. Saying clearly that the position, not the view, is driving the quote is the answer they want.
What it is testing
Position management as distinct from opinion about value.
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Preparing properly
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