I went through the interview process and was very impressed. I had n extremely positive impression from all the people that interviewed me. They combine serious wall street skills with heavy quantitative shit. a third of their front office holds PhD.s . the interview was tellin me about summer of code (google it), so i think they intend to hire from there. i also understand it's their 3rd year doing this. a lot of questions were abt risk, odds, anduncertainty, here's an example:
Guy: How many tons does the ocean weigh? Me: WTF. Guy: how much would you be willing to bet on it being within 25% of that at even odds? Me: ARUGH!!!!!
Other questions i remember (it was all a blur): make me a market on how much I weigh/this room's temperature/how many people live in manhattan/etc... would you bet a thousand dollars with me that's it's less than half your bid? why?) and open-ended questions onutility function questions (how much would you pay for a 1 in a thousand chance to win 1million dollars?).
"third of their front office holds PhD.s" --- my hopes just crushed lol. sounds like a cool place
I think Im in love
SA's gets 100k prorated and get to pick when they start this summer
Wtf? do you know what prorated means?
http://lmgtfy.com/?q=prorated
It's actually like $8300/mo. . . get back to yahoo finance bud.
"Other questions i remember (it was all a blur): make me a market on how much I weigh/this room's temperature/"
Can someone answer these questions?
Would it be like answering with, 'you probably weigh 170lbs and so I'd make the spread 165 ask and 175 bid' Or something like that?
No - the question is about information advantage. Functionally, making the market is going to be (i) Suggesting a weight or a range of weights, and (ii) Making odds. But the odds (price) doesn't depend soley on the size of the range, you also need to infer how much information he has.
Let's say he wants a market on his exact weight - although this is the toughest number to guess, you need to consider that if he's willing to bet on this, he may have just weighed himself.
I faced pretty much the same type of questions at Susquehanna, it's what got me interested in the firm. The answers to the questions are as above. You might want a wider spread when guessing someone's weight.
Hey yesman, can you be more specific with you're answer?
You're making a bet with him about his weight - he probably has more information than you. If you're buying, bid a wider spread on the weight and/or better odds. If you're selling, ask narrower spread and/or better selling odds.
For all you know, he just weighed himself before you came in the room, so you need to account for that information asymmetry.
The corollary to trading is recognizing an informational asymmetry in the market that is driving inefficiency. For example, based on price trends, you can try to identify if there's one big seller/buyer who's driving prices and hurting depth, failing to spread his trade out over time and amongst dealers. This is a technical issue, but it also suggests fundamentally changing investment views based on disseminating information. You may not know what the information is, but you know it's out there, and spreading, and based on your product, you can know where to start looking, and how to adjust your market.
I'm not a prop trader, but I imagine that if you make bets off of technicals and daily flow, you take advantage of this stuff.
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