Saturday, 8 December 2012

Optiver Tests: Some Tips

Optiver is a market-making firm. Market-maker is basically a financial institution which quotes both a buy-price and a sell-price for different financial instruments. Thus, they are an important source of liquidity in the market and they make profit by the price differences in sell and buy quotes.


Optiver has been hiring a good number of students from IIT-Bombay for the last 2 years. It has become one of the most craved firms here at IIT-B, purely because of the job location, the lucrative package it offers, and also the kind of work it does. It has primarily hired for it's headquarters in Amsterdam, but it might hire for it's offices in Chicago and Sydney too.

Optiver has a very rigorous testing and interviewing process. It takes 3 written tests, and after every test it scalps approximately 50% of the students.

Shortlisting for the test is based on your Resume and CPI. Around 50% students are shortlisted for the test out of the total students who applied.

Test #1 : Speed Arithmetic (80 questions, 8 minutes, MCQ)

This is a pen-and-paper 8 minute arithmetic test! Yes you heard it right, it's only for 8 minutes. That's the beauty of it, in 8 minutes, it gets decided whether you are eligible for Optiver or not. It's a arithmetic speed-test and contains 80 simple arithmetic questions and you need to get around 60 right to clear this round. I recommend TraderTest for improving your chances.

1) The questions are very easy and based on + - * / only. Mostly integers.
2) Time taking questions are the ones involving fractions and mixed fractions
3) Since it's a pen and paper test, some time gets wasted on searching for the correct option and then  marking the option on the OMR sheet, so effectively you have less than 8 minutes.
4) Also, sometimes the options are not in their most simplified form eg. if the answer is 1/2, then you need to look for 3/6 or 6/12.
5) You get +1 for every correct answer and -2 for incorrect. You get -2 for skipping a question, Oops!
6) Cut-off score is around 60/80.


Test #2 : Sequences and Progression (25 questions, 30 minutes, MCQ)

After the 8-minute test around 50% of the students qualify for the 2nd test. For every question, you are given 6-7 numbers and then you have to recognize the next number in the sequence, you are given options to select from. The cut-off for this test is around 22/25, and there is no negative marking. Around 50% students clear this round.

You can practice from TraderTest, but it's not comprehensive. So you should also look at other resources on the web and in CAT study material.

Test #3 : Analytical Puzzles (Around 10 questions, 1 hour, Subjective)

The puzzles are math and number oriented. Practice a lot of puzzles from the web, some puzzles might get repeated. You need to write down the  correct approach to get full marks. Even if you don't know the right answer, writing some logical steps (although incomplete) might fetch you some marks.



Approximately half the students are eliminated after each round, so eventually only 1/8 of the total number of students make it to the final shortlist. At our time, around 35 students made it to the final shortlist out of 300 students who appeared for the test.

I have tried to give information as accurately as possible, but if you find any of the above incorrect, please bring it to my notice. I hope the above post helps you in your preparation :]

4 comments:

  1. You should also try calculationrankings.com, to get used to the time pressure and speed mental math

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  2. @wout, Thanks a lot for suggestion. I will update the post accordingly.

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  3. Hi is test three a new test? Because I've never heard of this one the third test has been another arithmetic test... see for example http://www.trade2win.com/boards/trading-firms/30067-information-optiver-tests.html

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  4. @emza, I don't know whether it's a new test. But it has been conducted by Optiver in 2011 and 2012 at IIT-Bombay and had a considerable weight in selection process.

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