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.
Also, because sales and trading interviews are more like “choose your own adventure” games, it’s harder to make broad statements about them.
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:
If you have an interview coming up for an execution trader role solid preparation will help you stand out from other candidates. Execution traders work at investment banks, hedge funds and proprietary trading firms. They are responsible for executing buy and sell orders to facilitate client trades in global financial markets.
The interview aims to assess your technical knowledge trading skills, problem-solving abilities and fit for the high-pressure trading environment. Mastering answers to common execution trader interview questions will get you closer to landing the job.
1. Why are you interested in becoming an execution trader?
Hiring managers want to gauge your motivation for pursuing this career. Show that you’re interested in the global financial markets and excited about how fast-paced trading is. Talk about the analytical thinking, decisiveness, and risk management skills that make you a good fit for the job.
2. What do you know about our firm and this trading desk?
Thorough research is expected. Showcase your knowledge of the firm’s trading strategy, products, reputation and recent news. Speak intelligently about the specific asset classes and markets the desk trades in. This demonstrates sincere interest.
3. Walk me through a typical day as an execution trader.
Convey your understanding of core execution trader responsibilities. These include keeping an eye on markets for trading opportunities, carrying out orders based on what clients say, keeping risk within acceptable levels, communicating with sales teams, and balancing positions at the end of the day.
4. How would you handle executing a large buy order without spiking the price?
Illustrate your savvy minimizing market impact. Discuss tactics like breaking the order into smaller chunks, using an algorithm or executing when greater liquidity/volume exists. Share any relevant experience.
5. What factors do you analyze before executing a trade?
Demonstrate how you evaluate variables like current spread between bid/offer prices, trading volume, volatility, liquidity, market depth and historical price trends to determine optimal entry and exit points.
6. A client wants you to execute an order you feel is high-risk. What do you do?
Show judgment and client focus. Explain how you would share concerns diplomatically, suggest alternatives to meet their goals and execute the order if they still want to proceed. Highlight the need to follow compliance procedures.
7. How do you stay on top of global markets, news and data?
Discuss sources you track like economic reports, earnings calls, analyst reports, business news and data feeds. Emphasize your proactive efforts to continuously monitor real-time information vital for sound trading decisions.
8. Describe your approach to managing trading risk.
Share how you utilize tactics like stop-loss orders, disciplined position sizing based on volatility, diversification and frequent mark-to-market checks to control losses on open positions. Risk mitigation is key.
9. What differentiates an excellent execution trader?
Highlight must-have qualities like calmness under pressure, laser focus, decisive thinking, mental math and analytics skills, strategic order handling and relentless risk management. Set yourself apart.
10. How do you prioritize and manage high pressure, time-sensitive tasks?
Share proven techniques to thrive in the fast-paced, high-intensity trading environment. Discuss staying focused, working with precision, tuning out distractions, and leveraging checklists/notes to meet tight deadlines.
11. What motivates you in a trading job?
Convey your competitive spirit, interest in continuously honing skills and passion for the challenge of financial markets. Share how you thrive on the thrill of daily wins achieved through skill and analysis.
12. Where do you see your trading career in five years?
Articulate ambitious yet realistic goals to progress, such as head trader, desk lead or manager. Discuss developmental areas like expanding technical expertise, people management or new financial products. Demonstrate growth mindset.
Preparing strong, concise responses to these common execution trader interview questions will impress hiring teams with your trading acumen, client focus and firm fit. Show you have what it takes to excel managing the fast pace, complexity and risk of this rewarding yet demanding job. Now go ace that interview!
Why Sales & Trading?
It is thought that most of the students will go into sales.
In essence, it’s the last two parts of your story: describe how you started out 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].
Keep in mind that as you move up in sales, 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 could 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. But that’s about it.
Sales and Trading Interview Questions, Part 2: Market Questions
Market-based questions span a wide range:
Tell me about a recent news story related to the financial markets and your opinion of it.
Pitch me a stock (or FX, option, bond, or other trade ideas).
If you had $10 million to invest, what would you do with it?
What’s the S?
These questions aren’t “hard,” but the answers change every day, so you’ll need to keep reading the Financial Times (FT) or Wall Street Journal (WSJ).
Pay special attention to the front page and “Markets” sections of both.
We’ve covered hedge fund stock pitches extensively before, and you can follow the outlines and examples there.
But there are a few additional points to note in the context of sales and trading interview questions:
- Length: Aim for 60 to 90 seconds. If you go on for too long, they’ll get bored.
- More Than Just Long/Short Stocks—For instance, you could suggest buying call options, put options, or other derivatives to put your idea into action. You could also pitch an idea about almost anything else, like FX, bonds, commodities, or even goods.
- What makes you think that the price of the security will change, and why isn’t that thought already priced in? What do you know that other people don’t?
- In S, stop losses, time frames, and risk factors are all more important.
One long and one short idea should be based on stocks, bonds, or possibly their derivatives. Another “macro” idea should be based on foreign exchange, sovereign bonds, commodities, or something else in that area.
For some example pitches, refer to the stock pitch or equity research recruiting articles.
When asked where they’d put $10 million, you should always start by asking what their goals are and how much risk they are willing to take. Then, give them high-level percentages by asset class.
It’s pretty simple: younger people can afford to take more risk by putting more of their money into stocks, while older people need to save money because they can’t afford big losses, so they’ll put less of their money into stocks.
But you also need to factor in the macro environment.
For instance, if interest rates are very low or even negative right now, a traditional 60/40 split between stocks and bonds might not make sense, especially if the person’s main goal is to make money in retirement.
It might make more sense to trade the bonds for precious metals, other assets, or real estate—anything that can bring in money or go up in value when interest rates are very 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):
- Stocks: US – DJIA, S
- CDX NA IG, CDX NA HY, iTraxx Europe, iTraxx XO, SovX WE, and SovX CEEMEA helped make this video.
- FX: EUR/USD, USD/JPY, GBP/USD, and RMB/USD
- Commodities: Oil and gold
- Rates of Interest: LIBOR (or SOFR when it’s phased out), the Fed Funds rate, and rates set by the BOE and ECB. T-bond yields on 2 and 10 years.
Facebook/Meta Product Execution Interviews: Tradeoff Questions
FAQ
Why do you want to be an execution trader?
Why do you want to be a trader interview question?
