33 Interview Questions for Traders (With Example Answers)

Top 6 Trading Job Interview Questions

Sales and Trading Interview Questions: What Do They Want to See?

The recruiting process typically starts with an online application, moves into a HireVue video interview or phone interview, and then concludes with an assessment center if you’re in EMEA or Hong Kong – or a Superday if you’re in North America.

“Interview questions” will come up in all parts of this process, from the HireVue or phone interview to the AC or Superday.

We’ve covered sales & trading assessment centers in the article on the rates trading desk, so please refer to that for tips.

Professionals want to see the following qualities in your responses to interview questions:

  • A hunger to trade or sell.
  • Quick thinking.
  • The ability to take risks and stay calm under pressure.
  • A willingness to go against the mainstream.
  • A solid rationale for why you’re interested in S&T rather than related fields like asset management or hedge funds.
  • Interest in a specific product, such as equity derivatives or sovereign bonds.
  • Being an athlete helps a lot because it demonstrates your drive and risk-taking ability.

    Most candidates enter sales & trading out of undergraduate programs, but some are also hired from Master’s programs and MBA programs (though MBA hiring is far less prevalent).

    There are also a few transfers from the middle office and other teams at the bank.

    The main categories of sales and trading interview questions are:

  • Fit / Behavioral – Including your story and “Why trading? / Why sales?”
  • Market – Including your knowledge of recent events, key market indices and prices, and stock pitches or other trade ideas.
  • Product / Client – Can you explain the Greeks? Do you know what metrics like duration and convexity mean? For sales, how would you handle problematic clients?
  • Brainteaser / Math – Quick, what’s 37 x 7? What about 261 + 839? How about the square root of 0.9?
  • The initial HireVue interview focuses on generic fit / behavioral questions, but a few simple market-based questions could also come up.

    After the first round, interviewers will usually start by asking for your story, but they’ll quickly move into the other categories above.

    Squaring 2-Digit Numbers

    This formula is the trick for squaring 2-digit numbers:

  • X^2 = (X + Y) * (X – Y) + Y^2
  • And then you set Y such that either (X + Y) or (X – Y) ends with “0.” Examples:

  • 49^2 = (49 + 1) * (49 – 1) + 1^2 = 50 * 48 + 1 = 2500 – (50 * 2) + 1 = 2401
  • 56^2 = (56 + 4) * (56 – 4) + 4^2 = 60 * 52 + 16 = 60 * 50 + 60 * 2 + 16 = 3000 + 120 + 16 = 3136
  • Other Market Questions

    For the one about where you’d invest $10 million, always start by asking for the person’s goals and risk tolerance and then giving high-level percentages by asset classes.

    It’s pretty straightforward: younger people can afford to take more risk by weighting equities more heavily, while older people need to conserve capital because they can’t afford large drawdowns, so they’ll tend to put less in equities.

    But you also need to factor in the macro environment.

    For example, if interest rates are currently very low or negative, a traditional 60/40 stock/bond allocation may not make sense, especially if the person’s main concern is income generation in retirement.

    It might make more sense to swap the bond allocation for precious metals, alternative assets, or real estate – anything that might generate cash flow or increase in price when interest rates are extremely low.

    In terms of facts and figures, you should have a good idea of the following, both recently and over the past 6-12 months (check Bloomberg and markit.com):

  • Equities: US – DJIA, S&P 500, and VIX; Europe – Estoxx, FTSE 100, and VStoxx; Asia – Nikkei and Shanghai Composite
  • Credit: CDX NA IG, CDX NA HY, iTraxx Europe, iTraxx XO; SovX WE, SovX CEEMEA
  • Commodities: Oil and gold
  • Interest Rates: LIBOR (or SOFR when it’s phased out), Fed Funds rate, and rates set by the BOE and ECB; also, 2-year and 10-year Treasury yields
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