PRACTICE GUIDE DRW
DRW Market Making Practice Test
DRW 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 DRW'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 DRW 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 DRW’s own.
What it screens
A Chicago-based principal trading firm covering fixed income, energy, crypto and real estate alongside its core trading business.
- ✓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 DRW
A Chicago-based principal trading firm covering fixed income, energy, crypto and real estate alongside its core trading business. 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 4 other screens at DRW, 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
DRW 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 DRW’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 K P 2 F S 3 M T 4 Q L 5 Z W 6 A R 7 Y U 8 G E 9 O B 10 D X 11 I J 12 C N 13 H V
What is the probability a wager on W scores at least 1? Answer as a percentage.
Answer 30.8
W scores 5 - W, so it reaches 1 when W is 4 or lower. That is 4 of 13 rows: 30.8%.
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.
Adverse selection
Whoever trades with you may know something. Size and spread are the defence.
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 M Z 2 A K 3 L Y 4 C Q 5 O R 6 G F 7 E N 8 D S 9 I P 10 X J 11 H V 12 W T 13 B U A single-letter wager carries 3.74 dollars of standard deviation per unit, because the winning row is uniform on 1 to 13.
Your sizing rule is edge divided by variance, times bankroll. The variance of one unit is 14. With a bankroll of $7000, how many dollars do you put on T at 2?
Answer 1500
T is worth 5 and costs 2, so the edge is 3. 7000 × 3 ÷ 14 = 1500. Double the edge and you double the size, double the variance and you halve it.
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
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 G J 2 X K 3 I C 4 W L 5 T O 6 V F 7 Y E 8 H S 9 N Q 10 U P 11 B D 12 A Z 13 M R A single-letter wager carries 3.74 dollars of standard deviation per unit, because the winning row is uniform on 1 to 13.
A counterparty offers you V at minus 1, with no fee either way. What do you do?
- Sell as much as the limit allows, because minus 1 is the fair price
- Buy as much as the limit allows, because minus 1 is the fair price
- Pass. The edge is zero and each unit still carries 3.74 of risk
- Buy a small amount, because a fair price is worth 1.87 a unit in option value
Answer Pass. The edge is zero and each unit still carries 3.74 of risk
V is worth 6 - 7 = -1, which is exactly what is being quoted. Trading at fair value pays nothing and still takes 3.74 of standard deviation a unit. Variance with no edge attached is a cost.
Expected value of a wager
Pricing a payoff before quoting around it, because a quote is an expected value with a margin.
Example
You roll a fair die 3 times. Probability of at least one six?
- 50%
- 32.1%
- 42.1%
- 0.5%
Answer 42.1%
Complement: 1 − (5/6)^3 = 42.1%. Adding 1/6 each time double-counts.
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.
- 03Quote 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.
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 DRW
Common questions
- Is the DRW 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 DRW 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 DRW 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.
Hiring now: current DRW quant openings, refreshed daily.