PRACTICE GUIDE ALL OPTIONS
All Options Market Making: what the test is, and how to train for it
All Options does not publish the shape of its market making screen, and candidates describe it as 6 to 20 questions in 10 to 30 minutes, roughly one to three minutes per question, answered by typing the number, with no calculator.
Those are ranges across firms running this format rather than All Options's own figures, so treat them as the shape to train against and check the instruction screen on the day for the marking rule.
Outcry is not affiliated with All Options and has no access to their assessment content. This guide describes an assessment format that candidates report publicly; the questions here are generated by Outcry and are not All Options’s own.
What it screens
An Amsterdam equity derivatives market maker with a desk in Austin, Texas.
- ✓Setting a bid-ask spread that reflects your uncertainty
- ✓Updating quotes after a fill (adverse selection - the person who traded knows something)
- ✓Inventory management: skewing quotes to flatten a position
- ✓Hedging exposure instead of letting it build
Where it sits at All Options
An Amsterdam equity derivatives market maker with a desk in Austin, Texas. What that means for the screen is that the questions tend to be drawn from the work rather than from a textbook, so the format below is the shape to train against rather than a syllabus.
Candidates also report 3 other screens at All Options, covered separately on this site. Where a firm runs several, they usually sit in one round rather than spread across the process, so the pacing of the whole set matters more than any single section.
The format
All Options does not publish this screen's shape, and it varies between firms, so these are the ranges candidates report rather than exact figures.
| Questions | 6 to 20 |
|---|---|
| Time | 10 to 30 minutes |
| Per question | one to three minutes |
| Negative marking | No |
| Answer style | Typed price, spread or size |
| Where it sits | Later round, often live with a trader |
What it tests, with a worked example
Every example below is generated by Outcry, drawn from the same question generators the timed drills run. None of them is All Options’s.
Pricing under partial information
Half the board is hidden, and the quote has to price what you cannot see.
Example
HOW IT SCORES One of the 13 rows is drawn at random as the winning row. Every row is equally likely. A letter scores its own row number minus the winning row number, and a wager pays that score in dollars per unit. ROW LEFT RIGHT --------------------- 1 D M 2 F Y 3 B E 4 T A 5 ? ? 6 ? ? 7 ? ? 8 ? ? 9 O Q 10 K S 11 I R 12 C W 13 G X Rows 5 to 8 are face down. Between them they hold H, J, L, N, P, U, V, Z, but not in any stated order.
You hold 20 units of Z. What is the worst the position can score, in dollars?
Answer -160
The worst case stacks both unknowns against you: Z in row 5, the highest of the face-down rows, and row 13 winning. That is 5 - 13 = -8 a unit, or -160 over 20.
Option mechanics
Payoffs, parity and moneyness, at the speed a trading floor asks them.
Example
The stock is $100. In 6 months it is either $125 or $80, nothing in between. The rate is 4%. What is the $100 call worth today?
Answer 11.99
Risk neutral probability of the up move: q = (e^(rT) - d)/(u - d) = (1.0202 - 0.8)/(1.25 - 0.8) = 48.93%. The call pays $25.00 up and $0.00 down. Price = e^(-rT) x [48.93% x $25.00 + 51.07% x $0.00] = $11.99. q is not anyone's forecast - it is the weight that makes the discounted stock a fair game, which is exactly what the replicating hedge enforces.
The Greeks
Delta, gamma, vega and theta as directions rather than formulas.
Example
You are short 5 of the $30 calls, each on 100 shares, with a delta of 0.16. How many shares do you buy to get flat?
Answer 80
Each contract is 100 shares at 0.16 delta, so 16 shares of exposure. Short 5 of them is 5 x 16 = 80 shares short, and buying 80 shares flattens it. The hedge only holds for the next small move - gamma moves the delta, which is why it has to be redone.
Updating on a fill
Being lifted is information. The next quote should not be the same as the last.
Sizing the trade
How much to do at your own price, which is a different question from what the price is.
Example
A drawer holds 31 fair test coins and one that has heads on both faces. One is taken out at random and tossed 3 times. It comes up heads every time. What is the probability that it is the two-headed one?
Answer 0.2051
Bayes, with the prior 1/32 on the two-headed test coin. The two-headed one gives 3 heads with probability 1; a fair one gives 3 heads with probability 1/2^3 = 1/8. Posterior odds are prior odds times the likelihood ratio: (1 to 31) x (8 to 1) = 8 to 31. As a probability that is 8/(8 + 31) = 0.2051. Every extra head doubles the odds, so the evidence compounds fast.
Expected value of a wager
Pricing a payoff before quoting around it, because a quote is an expected value with a margin.
Example
A market quotes odds of 4-to-3 against an event. What is the implied probability?
- 75%
- 57.1%
- 42.9%
- 133.3%
Answer 42.9%
Odds of 4-to-3 against means 3 favourable out of 7 total: 3/7 = 42.9%.
What a good score looks like
There is no score to report on most of these. Market-making rounds are judged on the reasoning you narrate as much as the number you land on, which is why candidates describe them as the hardest round to prepare for and the easiest to improve at.
How to train for it
- 01Play a round where you get filled and have to re-quote. The update is what the round is actually testing.
- 02Quote wider than feels comfortable to begin with, then tighten. A trader can talk you down from a wide market; a blown-out fill does not come back.
- 03Separate the two questions every time: what is it worth, and how much will I do. Answering them together is what produces an indefensible quote.
TRAIN IT HERE
The drills that match each section
Market Maker
Quote spreads, take fills, and manage inventory against informed flow.
Basket Arbitrage
Spot mispricings between a basket and its components before they close.
Delta Defender
Keep a book hedged as the underlying moves - free to play.
SIT THE FULL BATTERY
All the sections back to back on one clock, marked the way the real screen marks them, with a by-skill breakdown at the end. Included with any pass.
Also reported at All Options
Common questions
- Is the All Options market making test multiple choice?
- Reported as typed price, spread or size. Formats move, so treat this as the shape rather than a guarantee.
- How long is the All Options market making test?
- Candidates report 6 to 20 questions in 10 to 30 minutes, roughly one to three minutes per question.
- Is there negative marking on the All Options market making test?
- No. A wrong answer costs nothing beyond the mark you would have earned, so leaving an item blank is never better than guessing at it.
- How do I practise for it free?
- Every drill linked on this page is free to play, with no account, inside a daily run cap. Questions are generated fresh each run, so there is nothing to memorise between attempts.