Skewing a quote
Definition · Level 11 · Interview practice
Keep reading with Tradecraft
Without an account, you can read three definitions every 30 days. Tradecraft explains all 738 terms and strategies, with the lessons that teach them, flashcards that come back before you forget, quizzes and a payoff lab.
Shading both sides of your quote in one direction to work off a position: up after you’ve sold (to attract sellers), down after you’ve bought.
Example
Short 10 at 7.5 on a dice sum → re-quote 7 at 8.
Where Tradecraft teaches it
Level 11 · Interview practice, in the lesson “Market-making games”: Make a two-way price, size the width to your uncertainty, and react correctly when you get hit or lifted.
Related terms
- EdgeExpected profit on a trade: the distance between the price you dealt at and fair value, times size (and the value of a point).
- Quote widthThe gap between your bid and your offer. It should reflect your uncertainty and the risk the other side knows more; too big is useless, zero gives…
- √2, √3 and e≈ 1.414, ≈ 1.732 and ≈ 2.718. With independent returns, vol over two or three periods is one-period vol times the first or the second; the last is…
- √252≈ 15.87 — the factor between daily and annual volatility on trading days: annual σ = daily σ × 15.87.
- √365≈ 19.1 — the calendar-day annualisation factor, for markets that trade every day (crypto) or quantities measured over all days of the year, weekends…
- 1.05^10≈ 1.629: ten years at 5% compounded grows money by about 63%, not 50% — the benchmark for sanity-checking any compounding answer.