PRACTICE GUIDE CITADEL SECURITIES
Citadel Securities Market Making Practice Test
Citadel Securities 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 Citadel Securities'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 Citadel Securities 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 Citadel Securities’s own.
What it screens
A market maker quoting across equities, options, fixed income and ETFs globally.
- ✓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 Citadel Securities
A market maker quoting across equities, options, fixed income and ETFs globally. 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 5 other screens at Citadel Securities, 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
Citadel Securities 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 Citadel Securities’s.
Quoting a two-sided market
A bid and an ask around a fair value, wide enough to survive being wrong.
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 F W 2 J K 3 I M 4 T R 5 A O 6 G Q 7 V C 8 U Y 9 L D 10 E B 11 H X 12 P Z 13 N S
Which of these wagers is worth exactly zero?
- V
- G
- L
- F
Answer V
A letter is worth its row minus 7, so only row 7 prices at zero. V is there. The others are worth L 2, G -1, F -6.
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 Q I 2 V F 3 S H 4 K L 5 T M 6 U X 7 ? ? 8 ? ? 9 ? ? 10 ? ? 11 R E 12 B D 13 Y Z Rows 7 to 10 are face down. Between them they hold A, C, G, J, N, O, P, W, but not in any stated order.
A wager on G plus N pays both scores added together. What is one unit worth, in dollars?
Answer 3
Each is equally likely across rows 7 to 10, averaging 8.5, so each leg is worth 1.5. Two legs give 3. Knowing they cannot share a cell does not change either average.
Option mechanics
Payoffs, parity and moneyness, at the speed a trading floor asks them.
Example
You buy the $70 call at $5.74 and sell the $90 call at $1.74, same expiry. What is the most it can lose, per share?
Answer 4
Below 70 both legs expire worthless and the loss is the $4.00 net debit. That is the floor - a debit spread can never lose more than it cost. The mirror of it is the $16.00 cap on the profit: the 20 point strike gap is split between the two.
The Greeks
Delta, gamma, vega and theta as directions rather than formulas.
Example
Rates move 25 basis points. Two $50 calls, one with 1 month to run and one with 36 months. Which price moves more?
- The 1 month one, because its gamma is higher.
- The 36 month one.
- They move the same - the strike is identical.
- The 1 month one, because it is closer to settlement.
Answer The 36 month one.
Rho scales with how long the strike payment is deferred. The rate effect works through K x e^(-rT), and the sensitivity of that to r carries a factor of T, so 36 months has roughly 36 times the rho of 1 month. On short dated options rho is a rounding error next to vega and gamma, which is why traders ignore it on the front month and not on LEAPS.
Expected value of a wager
Pricing a payoff before quoting around it, because a quote is an expected value with a margin.
Example
A fair 4-sided die is rolled once. Expected value?
- 4
- 3
- 2.5
- 2
Answer 2.5
(1 + 4) / 2 = 2.5.
Talking while you think
These rounds are scored on the reasoning you say out loud, not only the number you land on.
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
- 01Get fast on fair value first. You cannot quote around a number you are still computing.
- 02Practise saying the spread out loud with a reason attached. Width without a reason reads as guessing.
- 03Play a round where you get filled and have to re-quote. The update is what the round is actually testing.
TRAIN IT HERE
The drills that match each section
Market Maker
Quote spreads, take fills, and manage inventory against informed flow.
Poker Market Making
Make a market on the sum of card ranks and requote as each card is revealed.
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 Citadel Securities
Common questions
- Is the Citadel Securities 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 Citadel Securities 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 Citadel Securities 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.