Oct 08, 2026 by Offer

IMC Market Making 2027: Quoting With Unknown Information

The IMC Trading green gloves market question — commonly reported by candidates as "Make a market on the number of green gloves in a box" — tests quoting with unknown information: open centered on your prior with a protective spread, let order flow move your mid, and manage inventory by skewing quotes.

What This IMC Trading Green Gloves Market Question Assesses

The twist here is "unknown information" — the interviewer may know something you don't, and your quotes must survive that. IMC tests adverse-selection pricing directly: can you set spreads that compensate for trading against potentially better-informed flow, while still trading enough to learn? Quotes that never get hit teach nothing; quotes that get picked off lose money.

How to Answer This IMC Trading Green Gloves Market Question

Play the three phases, narrating each:

Phase 1 — Prior-centered open. Estimate the plausible range for the count and center your mid on your best guess; open wide enough to survive being wrong. Example line: "No information on the total, so I'll center on the middle of the plausible range with a wide market — say 40 bid, 60 ask — and let flow educate me."
Phase 2 — Flow-driven updating. Every trade is a signal. Repeated buying means your mid is low — move it up; repeated selling means the reverse. Update fast and say so: "Lifted twice — my mid was stale, moving to 50–68."
Phase 3 — Inventory skew. As your position builds, shade quotes to flatten it: long gloves → lower both quotes to attract sellers. Never let the book run one-sided while you wait and hope.

Voice the core tension explicitly: "I'm balancing spread income against the risk that the flow knows more than I do — so I start wide, update on every trade, and never hold a big position into uncertainty."

Common Mistakes

Opening too tight. With unknown information, tight early quotes are an invitation to be arbitraged — width is your protection until flow arrives.
Sticky mids. Failing to move after repeated one-sided flow shows you're pricing your ego, not the market.
Ignoring inventory. A market maker who accumulates a huge directional position has stopped making markets and started gambling.

Candidates commonly report the interviewer asking "why did you move your market?" after every adjustment — have the flow-based reason ready each time. The updating logic, articulated clearly, is what scores; the final P&L is secondary.

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FAQ

How is this different from the urn market-making game? It's the same core skill with less structure — no stated total, possibly asymmetric information. The framework (prior, spread, update, skew) transfers directly.

What if I suspect the interviewer knows the answer? Assume some flow is informed — that's what the spread is for. Widen when flow is aggressive, and let the mid follow persistent direction.

Should I ever stop quoting? Widening aggressively is the professional equivalent; outright refusal is rarely needed in the game. Keep quoting, keep learning.

What's the single most important habit? Updating the mid on flow. Everything else — spread width, skew — is secondary to keeping your price honest as information arrives.

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