Trading game strategy
Hi everyone, my first post here.
Apparently there is a trading game that many prop shop like to play to test their candidates all together when interviewing and I just want to find more details about it and see what you guys think is the best strategy here:
Suppose that there are 5 people and each have 6 regular dices in a cup. In the beginning everyone roll their dices in the cup face down. After that you can peek what your dices are in your cup and make a spread accordingly. Then there is another person(the interviewer) who will start to provide client ask-bids and each will buy, sell and adjust their spread accordingly.
Now this obviously is mimicking market making and you definitely want to keep your position neutral.
The E(x) = 105, so your initial spread should be around that.
Here is my question:
How is the client order filled? Does everyone get the chance to react to it, or only the fastest person who react to it can get it?
How would you adjust your spread based on each filled order and people's reaction to it?
I feel like this in some sense is like playing Texas hold'em, you have to guess what the other person's dices are. Although I am not sure how much bluffing is involved in this.
What you guys think?
The key to this game is to judge who is smart and who is just guessing. Thats really the secret to these games. Brings to mind that scene from Rounders where Damon's character guesses everyones hand by reading their faces. You need to decide who knows their shit and who is clueless. Then you want to get info from the ones that are smart, and trade with the ones that arent.
For example, if the initial market made is around the EV, and someone you have assessed to be smart buys it then you know he has a high number, and so immediately you have an extra data point. Lets say you have an average number, you go find someone dumb who is quoting EV and buy a little bit from him.
The game is not just about calculating EV, given you dont have all the info its more about reading the people playing the game and trying to infer information from how people act.
Thanks for the tip, that's what I thought too!
I think it is also possible to misled other candidates by adjusting to a wrong spread and take a small hit. This way you could potentially confuse some other players.
However, this really gets me thinking: how can you tell if a person if super smart and trying to confuse you, or he just has no clue and plays really bad? And if he is really good, how can you tell which is true and which is fake?
bump - would love some more info on this as I have a similar interview coming up. I believe it will be making a market for the price of fruits - any tips would be amazing
just so you are aware the plural of dice is dice. so you are given 6 dice, and you roll the dice.
the singular of dice was formerly die hence the term "the die is cast", but today dice is both plural and singular.
ty for info man
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