The interview questions for sales and trading are a bit of a puzzle because they are both easier and harder than the questions for investment banking.
They’re easier because you don’t have to remember as much, but they’re also harder because you can’t prepare or practice them the same way.
Also, there are a lot of questions that don’t have “right answers.” Interviewers ask them so that they can have a deep conversation about a subject.
Another thing that makes it harder to generalize is that sales and trading interviews are more like “choose your own adventure” games.
But if you say you’re interested in corporate bond sales, you’ll get a completely different set of questions.
Before choosing an adventure, though, let’s start with the qualities that interviewers want to see in candidates:
Getting hired as an equity trader is no easy feat. The role requires a unique combination of financial acumen strategic thinking and the ability to thrive in high-pressure environments. This means the interview process will be rigorous, with hiring managers looking to ensure candidates have what it takes to succeed.
If you have an equity trader interview coming up, preparation is key. To really stand out, you need to demonstrate an in-depth understanding of the stock markets, trading strategies, and risk management principles. I’ve compiled the top 35 equity trader interview questions that you’re likely to encounter along with tips on how to ace your responses
1. What is an “Over the Counter Market”?
This is a common first question meant to test your basic understanding of stock trading terms. The interviewer wants you to be able to explain that an over-the-counter (OTC) market is a decentralized market where people trade directly with each other, without a central exchange. Highlight that OTC markets lack transparency but allow customized terms between parties. Stocks that don’t meet major exchange listing requirements trade here.
2. What are the different levels of equity traders?
With this question, the interviewer is assessing your understanding of the typical trading hierarchy. Explain the progression from junior trader to senior trader to principal/portfolio manager. Junior traders focus on execution while senior traders develop strategies and manage key client relationships. Portfolio managers oversee all trading activities and make high-level investment decisions.
3. What do you understand by private equity transactions?
Demonstrate you grasp private equity by explaining it refers to investments made in private rather than public companies. Highlight that private equity firms acquire companies and restructure them to improve profitability before eventually selling them. Mention common PE strategies like leveraged buyouts, venture capital, growth equity, and distressed investing.
4. What are the two main types of orders in equity trading?
This tests your knowledge of order types. Explain the two main order types are market orders and limit orders. Market orders execute immediately at the current market price. Limit orders specify a price and only execute if that price is met. Mention other types like stop orders, all-or-none orders, and fill-or-kill orders.
5. What is equity funding?
Equity funding involves raising capital by selling ownership shares in a business. Your answer should touch on how it provides access to capital without incurring debt. Explain how equity doesn’t need to be repaid like debt but involves giving up ownership control. Discuss how risky it is for investors and that returns depend on future company growth and profits.
6. Walk me through a typical day as an equity trader.
This open-ended question allows you to demonstrate your understanding of the day-to-day realities of the job. Structure your response by outlining the key activities in chronological order:
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Arrive early to review overnight market performance
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Analyze financial news, economic data, earnings reports
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Identify trading opportunities based on analysis
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Execute trades per portfolio strategy
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Monitor open positions and adjust as needed
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Communicate with portfolio managers and clients
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Research companies and financial products
7. What trading strategies are you most familiar with?
With this question, the interviewer wants to see how much you know about real trading strategies, not just theoretical ones. Pick three strategies you have genuine experience with and demonstrate your understanding:
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Momentum strategies – buying securities trending higher and selling those trending lower
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Arbitrage – profiting on price discrepancies between markets
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Short selling – betting securities will fall in value so you can repurchase cheaper
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Pairs trade – matching a long and short position in two correlated assets
8. How do you evaluate a company before making a trade?
Showcase your research skills by walking through your process of analyzing a company:
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Review financial statements – focus on revenue, profits, cash flow
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Assess valuation metrics – P/E, P/S ratios, EPS trends
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Research qualitative factors – competitive position, management, industry trends
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Identify potential catalysts – product launches, restructuring plans
Explain how your analysis informs your trading strategy and price targets.
9. Describe a situation where you had to explain a complex financial concept to a non-expert client. How did you handle this?
Don’t get thrown off by the two-part structure. Break this behavioral question down into logical steps:
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Set the context – client, financial concept, challenge
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Explain your approach – use analogies, examples, visuals
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Highlight key communication skills – active listening, patience, simplifying complex information
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Share the outcome – client understood, you built trust
This showcases your client management abilities and communication skills.
10. How do you manage the stress and pressures associated with equity trading?
Don’t downplay the high-stress nature of the job. Rather, focus on proactively managing stress with:
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Regular exercise and proper work-life balance
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Developing strong risk management skills – stop losses, prudent position sizing
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Cognitive approaches – mindfulness, positive self-talk
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Relying on peer and mentor support
Emphasize that well-managed stress enhances focus and performance.
11. What risk management strategies do you utilize in your trading?
Use this opportunity to demonstrate your risk management expertise. Discuss key strategies:
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Diversifying across asset classes, sectors, geographies
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Setting stop losses and profit targets
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Using options contracts to hedge risk
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Maintaining disciplined position sizing
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Regularly reviewing and rebalancing portfolio
Highlight how these strategies minimize volatility and downside risk.
12. Why is securing the best trade execution price important?
With this question, the interviewer wants to see that you understand the impact small differences in entry and exit prices can have over thousands of trades. Discuss how every penny matters when managing large transaction volumes. Explain how poor trade execution eats into margins and undermines investment performance.
13. How do you stay up-to-date on financial news and markets?
This tests how committed you are to continually expanding your financial knowledge. Discuss resources you use daily:
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Reading financial newspapers, magazines, journals
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Watching financial news channels
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Setting up news alerts on your phone
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Following key analysts/economists on social media
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Reading research reports from banks and firms
Demonstrate your thirst for market insights.
14. What key economic indicators do you monitor that impact equity markets?
Choose 3-4 major indicators and briefly explain their relevance:
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GDP, inflation, unemployment rates
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Consumer spending and retail sales
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Interest rates and central bank policy
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Currency and commodity prices
This displays your understanding of how macroeconomics and equity markets are connected.
15. How does your both technical and fundamental analysis inform your trading?
A balanced trading approach utilizes both types of analysis. Discuss how you incorporate:
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Fundamental – analyzing financials, valuation, qualitative factors
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Technical – charts, volume, price patterns, indicators like moving averages
Explain how blending both provides greater context and insight than using either in isolation.
16. What experience do you have with algorithmic or automated trading systems?
If you have worked with algo trading, give an overview of the models you’ve developed – the data inputs, trading signals, execution logic. If you lack direct experience, discuss your general understanding at a conceptual level. Highlight your interest in learning these systems.
17. Describe your experience executing trades across different markets and asset classes.
Even if your background is mainly in equities, showcase any experience you have trading:
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Options, futures, forex, fixed income
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International markets
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Different exchange environments – floors, pits, electronic
Demonstrate desire to expand your trading horizons.
18. How would you handle a situation where a client is unhappy about investment losses?
Use a 4-step STAR format:
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Situation – dissatisfied client upset over falling portfolio value
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Task – calmly listen to client concerns and maintain trust
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Action – revisit original investment thesis, explain market volatility
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Result – retained client by providing context on loss
Emphasize the need for patience and transparency with clients during drawdowns.
19. What makes you passionate about equity trading as a career?
Convey genuine enthusiasm for the career highlights:
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Fast-paced, dynamic environment
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Continually analyzing markets and honing strategies
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Thrill of trading and competing against the market
Share how the constant challenges keep you engaged and motivated.
20. Why do you want to work specifically for our firm?
Research the firm in advance so you can target your response effectively. Pick out strategic elements that appeal to you:
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Firm culture and values
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Prestige of the brand
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Specific product and market expertise
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Training and development opportunities
Align your strengths with the firm’s needs.
21. Where do you see your equity trading career in 5 years?
Interviewers want to gauge your ambition and fit with the firm
“Walk Me Through Your Resume” or How to Tell Your Story
The beginning, your financial “spark,” your growing interest, and why you’re here today and your plans for the future are all parts of the investment banking story template that you can use for this question.
The differences are:
- You should say that you’re interested in a certain plan or product, like swaps, options, commodities, FX, or FX, and you should really know that one product well.
- You should also say that you want to work in a results-driven environment and that you’d like to work for a big bank because you’ll get to work with clients and trades and build a network that way.
You can use the same method for sales, but instead of learning all the technical details of a product, you should focus on building relationships with customers.
A reasonable example outline might look like this:
- Beginning: I grew up in [City or Country], went to [University Name] for school, majored in [Major Name], and did [Fun or Interesting Activity, Ideally a Sport] while I was there.
- Finance: You won a trading competition in your first year by studying the software industry and buying a stock that went up in 2020 and selling another stock that went down in 2015.
- Growing Interest: You did an internship at PWM and liked working with markets, but you wanted to work in a more results-driven environment. This is what led you to a small hedge fund, where you focused on currency swaps to help them with their hedging strategies. While you did well there, you wanted to get to know the staff and customers at a bigger bank better.
- Why You’re Here Today: Your Future: You want to keep trading foreign exchange and learn more about different types of swaps. This bank has a great practice, so you’re sure it’s the right group for you.
Why Sales & Trading?
Most of the students are likely to go into sales.
In essence, it’s the last two parts of your story: describe how you started in Field X and then moved to Field Y, which was more related to sales.
When you trade or sell [Product A], you want to be judged on how well you do. You also want to [learn the technical details of the product or trading or build client relationships in that area].
As you move up in sales, keep in mind that the work doesn’t always change much.
Prepare a “success” story, a “failure” story, and a leadership story, and use the STAR (Situation, Task, Action, Result) structure in your answers. This is the same method that was suggested in the article about investment banking fit questions.
You can also think about your good and bad points, but they aren’t as important in S.
One big difference is that you need to choose stories that show the traits that traders and salespeople want to see. For example:
- In a stock investing competition, you came up with a strategy that went against the crowd and did well because of it.
- You had a short amount of time to save a student club from going bankrupt, and you came up with a clever plan that worked out well for everyone.
- You thought about the risk of starting a new business and hedged your bets by testing it in small steps while keeping a part-time job.
- Even though the client at first thought it was too risky, you looked at his portfolio and came up with new strategies that gave him above-market returns.
- Even though you were behind in a debate, you quickly came up with a way to turn your opponent’s point of view in your favor, which helped you win.
The themes are thinking quickly, mitigating risk, performing well under pressure, and generating profits.
There isn’t a big difference between sales and trading in this first question category.
For sales, you can focus your stories a bit more on leadership and communication skills. For trading, you can focus them more on making money and reducing risk.
Equity Trader Interview Questions
FAQ
What questions are asked in an equity interview?
What makes a good trader interview question?
Why should we hire you as a trader?
What is an equity trader?
How do you answer an equity trader interview question?
This question can help the interviewer determine if you have the skills they’re looking for in an equity trader. Use your answer to highlight any skills that are relevant to this position and how you developed them. Example: “When it comes to equity trading, there are a few key skills that can make or break success.
What questions do employers ask equity traders?
Employers ask this question to learn more about your unique skills and talents. They want to know what makes you a valuable asset to their company. When answering this question, think of two or three things that make you stand out from other equity traders. These can be specific skills or experiences.
How do I become an equity trader?
They must have an in-depth knowledge of the stock market and be able to make quick decisions in order to capitalize on opportunities. If you’re looking to become an equity trader, you’ll need to be able to answer some tough questions in an interview.
What questions do interviewers ask a trader?
The interviewer may ask you a question like this to see how you handle uncertainty. They want to know that you can make decisions and act quickly when the market is volatile. In your answer, explain what factors you would consider before making a trade.
