Sales and trading interview questions can be some of the toughest in all of finance. Which is why sales and trading is the most varied department in big investment banks in terms of the types of work they do.
In every sales and trading department, there are people who work with dozens of different products, such as mortgage-backed securities, interest rate swaps, distressed debt, and equity derivatives.
Note: Usually, each “product” or asset class will have its own desk with salespeople, traders, and maybe even other people (like sales traders, quants, and structurers).
In a superday for a summer analyst or full-time job, you’ll be interviewing with at least three people from the sales and trading division. These people could be from any desk, so they can’t help but judge you based on how well you’d fit in with their team.
This basically means that people who are being interviewed need to know a lot about what goes on on a trading floor in order to do well. In other words, you need contextual understanding.
People don’t expect you to know how to think about gamma in a complex equity derivatives trade or how to think about how an out-of-court restructuring affects bad bonds during an interview.
However, it is very important to know how these things fit into the bigger sales and trading division and what the main functions of the major desks are.
Too little information is available on sales and trading interviews, so I made Sales and Trading Interviews. It has 13 guides and over 300 questions for sales and trading interviews, including breakdowns of all the major desks.
You should read this if you want to get into sales and trading. I wish I had it when I was applying for and starting my job as a summer analyst at Goldman Sachs.
Now lets review some questions. Also, at the end of this page, I talk about some common types of sales and trading interview questions and give you general tips on how to prepare for them.
Landing a sales trader role is no easy feat The interview process will likely be intense, with questions designed to assess your technical knowledge, analytical skills, and ability to thrive in a high-pressure environment Preparation is key. This comprehensive guide takes you through the 10 most common sales trader interview questions, providing tips on how to craft winning responses. Read on to ace your next interview.
1. Walk me through your experience with electronic trading platforms.
Trading platforms like Bloomberg Terminal are essential sales trader tools Interviewers want to gauge your proficiency with this key technology Emphasize your hands-on experience executing trades, analyzing data, and monitoring markets in real-time. Discuss specific platforms you’ve used and highlight any advanced features like automated algorithms. Demonstrate an understanding of how these platforms enable informed, split-second trading decisions.
Example response: “Throughout my career, I’ve extensively utilized Bloomberg Terminal for trade execution, market surveillance, and data analysis. I’m adept at leveraging its tools like proprietary trading algorithms, real-time analytics, and risk management functionality. This experience has sharpened my skills in reading market trends, reacting swiftly to price movements, and maximizing trade efficiency.”
2. How do you manage risk in your trading activities?
Risk management is paramount. Interviewers want to see that you take a disciplined, calculated approach to balancing risk and reward. Discuss the strategies and tools you use to mitigate loss, such as setting stop-losses, diversifying positions, and continuously monitoring markets. Emphasize the importance of managing emotions and adhering to plans despite fear or greed.
“Diversification, price targets, and constant vigilance are the key parts of my risk management strategy.” By spreading capital across diverse assets and sectors, I mitigate concentration risk. I use stop-losses on every trade to cap potential losses. Ongoing market monitoring allows me to adjust positions based on new developments. Most importantly, I remove emotion from decisions and stick to my plan. “.
3. Walk me through how you would handle a high-pressure trading situation.
Remaining composed under intense pressure is vital for sales traders. Use a real example that demonstrates quick, decisive action amidst market turbulence. Talk about how you looked at the situation, weighed your options, and made smart choices even though the stakes were high. Emphasize calmness, focus, and relying on experience.
Example response: “When X Company released an earnings warning, their stock plummeted 30% in pre-market trading. With millions invested in this stock across client portfolios, it was crucial I reacted swiftly once markets opened. I immediately sold off a third of our position to cap losses, then bought put options to profit from the falling price. Although it was a stressful situation with the phone ringing off the hook, I tuned out any panic and focused on taking smart, strategic steps.”
4. How do you go about developing client relationships?
Sales trading is a client-driven business. Talk about how you use understanding needs, clear communication, and great service to build trusting relationships. Share examples that demonstrate going the extra mile for clients. Emphasize relationship management skills.
Example response: “The key to developing client relationships is taking a consultative approach focused on their needs. Whether an institutional investor or individual, I invest significant time understanding short and long-term investment goals. I maintain open channels of communication to share ideas and insights. My goal is to earn clients’ trust by consistently offering excellent service, relevant insights, and investment outcomes that further their objectives.”
5. What strategies do you utilize to generate new business?
Employers want to see that you are enterprising and driven to actively develop new business. Discuss prospecting tactics you’ve used like referrals, events, and analytics-driven outreach. Share any successes in attracting new clients. Position yourself as someone who won’t wait for business to walk in the door.
Example response: “Throughout my career, I’ve leveraged both personal outreach and broader marketing tactics to develop new business. This includes consistently networking with prospective clients at industry conferences and social events to cultivate relationships. I also mine existing client data to identify referral opportunities within similar companies or sectors, then craft targeted pitches. These strategies have enabled me to successfully build my book of business.”
6. Walk me through your approach to analyzing the markets.
Sharp analytical skills are critical for success as a sales trader. Demonstrate your process for interpreting market trends and intelligence. Discuss sources like financial media, research reports, economic indicators, and price action. Outline how analysis guides your trade decisions and strategy.
Example response: “My market analysis starts with inputs from research publications, proprietary data sources, and price action observed in trading platforms. I combine fundamental and technical techniques – inspecting economic trends while also identifying technical price patterns. These inputs allow me to discern market sentiment, risk factors, and opportunities. I then synthesize this intelligence into trade ideas tailored to different clients’ objectives and risk tolerance.”
7. How do you determine when to buy or sell for a client?
Sales traders must make timely decisions to enter or exit positions. Discuss your approach to spotting the right moments by marrying real-time data with client goals. Share an example that demonstrates seizing ideal entry or exit points for a specific client trade scenario.
Example response: “Determining ideal moments requires weighing various data inputs against client context. When a long-term client wanted to buy cyclical stocks at cheaper valuations, I monitored pricing closely as economic indicators turned bearish. This data-driven timing allowed us to pick up value positions before a reversal unfolded. The result was acquiring holdings below target prices.”
8. Tell me about a time you successfully managed a complex client situation.
Share a story highlighting your problem-solving skills, coolness under pressure, and client relationship management abilities. Choose an example that shows navigating nuance and ambiguity to arrive at a successful resolution. Demonstrate listening skills and gaining trust through transparency.
Example response: “A risk-averse client was facing significant losses in their bond portfolio during rising rate volatility. They were anxious about losses growing. I immediately researched options strategies to hedge risks at minimal further cost. Walking the client calmly through the pros/cons of alternatives provided reassurance. The client felt heard and understood, ultimately agreeing to the hedging strategy I recommended.”
9. What processes do you have in place to ensure regulatory compliance?
Given heavy regulation of trading, interviewers want confidence you have strong compliance acumen and vigilance. Discuss license requirements, ethics training, transaction monitoring, and adhering to laws like KYC and AML. Position yourself as a consummate professional regarding oversight.
Example response: “From licensing to daily processes, compliance is central to my work. I maintain industry licenses and undergo regular ethics training. On a day-to-day basis, I monitor trading closely for any potential compliance issues. I also adhere strictly to client due diligence processes for KYC and AML. A clean compliance record has always been my top priority.”
10. Do you have any questions for me?
This is your chance to show enthusiasm and thoughtful interest in the role. Ask smart, well-researched questions about their trading strategy, unique value proposition, client focus areas, and training opportunities. This demonstrates genuine interest beyond just wanting “a job”.
Example questions:
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“What are the one or two most important drivers of success for sales traders in this role?”
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“How does your firm’s trading strategy differ from key competitors?”
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“What types of professional development and mentorship opportunities are available for new team members?”
With preparation and practice, you can tackle any sales trader interview question with confidence. Keep your answers client-focused, highlight technical abilities, provide real examples, and emphasize the soft skills crucial for thriving in a dynamic environment. Now get out there and land that job!
How is a Collateralized Loan Obligation (CLO) structured?
Asking someone about the structure of less obvious parts of the trading floor is a great way to see if they have taken the time to learn about the different desks.
Dont worry, no one is expecting you to know everything about how to model out a CLO waterfall (although thats a common test for a summer analyst at the end of their time on the CLO desk).
A CLO will be broken down into several tranches. The underlying cash flows of the leveraged loans that make up the CLO will be less important to these tranches as time goes on (to be discussed later).
The top tranche, which is made up of most of the notes that the CLO issues, is usually set up so that it gets an AAA rating from credit agencies. This makes investors feel safe about investing in it. That part at the bottom, called “equity,” will be paid last and not be rated, so it is seen as very risky.
One important thing to note about the graph above is that the leveraged loans that make up the CLO often add too much collateral to the issue. Based on this, equity should get a lot more than what they put in, as long as none of the loans go bad.
Leveraged loans are risky, though, and some of the loans that make up the CLO may not be paid back. It means that the CLO itself was issued with too much collateral. However, equity and some of the tranches above it may not be paid back in full over time.
Is there a particular area of sales and trading that interests you?
Like the last question, this is also an incredibly common interview question. However, its one that you should be very careful in answering.
This is because you don’t want to look like you know for sure that one spot on the trading floor is perfect for you before you even start.
When you say that you could be wrong and find a different area to be a much better fit, you should have a general idea of the area you think you would like to be in.
To put it another way, you want to show that you’ve done your research while also being honest about the fact that you won’t know what area is best for you until you start a rotational program or are given a desk.
At first glance, it may seem impossible to fully understand what a desk does, how the company works, and so on. before you begin. You can say, though, that you know the bank you’re interviewing with is good at credit trading and that you’re especially interested in high yield trading.
You then should get into why you find areas of credit like high yield to be fascinating. As an example, you could say that traders in high yield deal with a smaller pool of clients, that the product is less liquid than many others on the floor, and that there are events that could cause prices to change quickly, like an out-of-court restructuring or a real Chapter 11
I think it’s a good idea to end this question by saying that I’m open to exploring. Many people come into sales and trading with an idea of where they want to be, but they end up realizing that another area is a better fit.
Also, it’s a good idea to ask if the person is most interested in sales or trading on that desk. You can talk about why the sales or trading side is most appealing to you using the same points you made in the last question.
Goldman Sachs Sales & Trading Interview Questions
FAQ
What are sales and trading interview questions?
What makes a good sales and trader?
Why do you want to be a trader interview question?
How to prepare for a sales & trading interview?
Use STAR method to answer questions effectively, and show proper etiquette during the interview process. When approaching a sales and trading interview, you should be able to showcase your understanding of the trading floor, specifically, the distinction between desks, how S&T employees work, and how banks make money.
How many sales and trading interview questions are there?
Because of just how little information is out there on sales and trading interviews, I created Sales and Trading Interviews, which contains over 300 sales and trading interview questions and 13-guides (including breakdowns of all the major desks).
Why are sales and trading interview questions so difficult?
Sales and trading interview questions can be some of the toughest in all of finance. The reason being is that there is no division within major investment banks that is more diverse in what they do than in sales and trading.
What is a sales & trading interview?
The sales and trading interview is meant to test for finance knowledge, market interest and ability to handle stress. For sales, interpersonal skills and the ability to communicate why a trade makes sense to a client is important. For trading, being calm and remaining rational is key.
