PRACTICE GUIDE TMG
TMG Market Making Practice Test
This guide offers market making preparation for readers interested in TransMarket Group. The general practice ranges below are not a verified assessment specification for that employer.
Those are ranges across firms running this format rather than TransMarket Group's own figures, so treat them as the shape to train against and check the instruction screen on the day for the marking rule.
These are Outcry preparation topics, not a verified current firm assessment specification. Check your role-specific invitation for the test, timing, tools and recruitment stage.
Outcry is not affiliated with TransMarket Group 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 TransMarket Group’s own.
What it screens
A quantitative proprietary trading and technology firm.
- ✓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 TransMarket Group
A quantitative proprietary trading and technology firm. The topics here are Outcry preparation suggestions, not a verified firm syllabus or recruiting stage.
Outcry also has 3 other topic guides for readers interested in TransMarket Group. Their presence does not mean applicants must sit that many tests or that they belong to one recruiting round.
The format
These are general practice ranges, not a verified current assessment specification for TransMarket Group. Check the employer’s invitation for the actual format.
| 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 | Preparation topics · employer round unconfirmed |
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 TransMarket Group’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 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.
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 X L 2 P B 3 G C 4 F Q 5 M T 6 N E 7 I J 8 Z W 9 R U 10 Y K 11 S A 12 V D 13 O H
A counterparty has already seen the winning row. You have not. They offer to sell you one unit of U at 1, and they make that offer only when selling is good for them. What is the expected profit in dollars if you buy?
Answer -3
Unconditionally U is worth 2, so 1 looks like 1 of edge. But they only offer when the score is below 1, which is 5 of the 13 rows: scores 0, -1, -2, -3, -4, averaging -2. The trade you actually get is worth -2 - 1 = -3. The offer itself is the information.
Option mechanics
Payoffs, parity and moneyness, at the speed a trading floor asks them.
Example
The stock is $50 and moves in two steps of 12 months each. Every step it multiplies by 1.15 or by 0.85. The rate is 2%. What is the $53 call worth today?
Answer 4.06
Per step, q = (e^(rT) - d)/(u - d) = 56.73%. The three terminal nodes are $66.12, $48.87 and $36.13, paying $13.12, $0.00 and $0.00. Weighted by q^2, 2q(1-q) and (1-q)^2 that is $4.22 at expiry, discounted over two steps: $4.22 / 1.0408 = $4.06. The middle node needs the factor of 2 - there are two paths through it.
The Greeks
Delta, gamma, vega and theta as directions rather than formulas.
Example
You are long 50 of the 3 month at the money calls. The stock sits still all week. What is theta doing to you?
- Theta is negative - the position bleeds value as the days pass.
- Theta is zero while the stock does not move.
- Theta only bites in the final week.
- Theta is positive - time is on the side of a long option.
Answer Theta is negative - the position bleeds value as the days pass.
A long option is long time value, and time value only goes one way. With the stock still, nothing is earned back - gamma pays only when the stock actually moves, and it has not. Theta is negative for every long option, call or put, and it runs every calendar day including the weekend, not just the last week.
Updating on a fill
Being lifted is information. The next quote should not be the same as the last.
Expected value of a wager
Pricing a payoff before quoting around it, because a quote is an expected value with a margin.
Example
Roll 2 fair dice. Probability every die shows a six?
- 1/216
- 1/36
- 2/6
- 1/12
Answer 1/36
Independent rolls multiply: (1/6)^2 = 1/36.
What a good score looks like
No current employer cutoff is verified for these general practice ranges. Use the worked examples to identify what to study and check your role-specific invitation for the actual assessment rules.
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.
- 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.
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 TransMarket Group
Common questions
- Is the TMG market making test multiple choice?
- This guide uses typed price, spread or size for practice. The employer’s current answer format was not verified here.
- How long is the TMG market making test?
- This guide uses general practice ranges of 6 to 20 questions in 10 to 30 minutes. They are not a verified current employer format.
- Is there negative marking on the TMG 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?
- The warm-up drills are free with no account, and every pass opens the rest of the drills linked on this page. Questions are generated fresh each run, so there is nothing to memorise between attempts.